The Economic Data Thread 2.0

[Deleted User 8570]

It's been pretty quiet data wise but 3 states gained jobs in December, 5 lost and the other 42 were unchanged:

WASHINGTON (AP) — Employers significantly increased hiring in just three U.S. states last month, while five states reported large cuts.

The Labor Department said Tuesday that job totals were little changed in the other 42. Unemployment rates fell noticeably in 10 states and rose in just one.

The weak gains in most states partly reflect a downshift in hiring nationwide. Employers added 156,000 jobs last month, down from 204,000 in November, and the U.S. unemployment rate ticked up to 4.7 percent from 4.6 percent. In the final three months of last year, hiring averaged 165,000 a month, down from 282,000 a year earlier.

In all of last year, half the states reported large job gains, while only two — Wyoming and North Dakota — lost a significant number of positions.

Oregon reported the biggest gain in 2016, adding 3.3 percent more jobs. Florida followed, with a 3.1 percent gain, and Nevada and Washington both reported 3 percent increases.

California added the largest number of jobs, adding 332,500, followed by Florida with 251,400 and Texas with 210,200. Those increases partly reflect their larger populations.

Steady, if modest, hiring during the seven-year old recovery has pushed many states' unemployment rates to rock-bottom levels. New Hampshire has the nation's lowest rate, at 2.6 percent. Massachusetts and South Dakota follow at 2.8 percent each.

Alaska reported the nation's highest rate, at 6.7 percent. New Mexico has the second-highest, at 6.6 percent.

[Deleted User 8570]

Housing is in short supply... the number of existing homes for sale fell in December to their lowest level since 1999. This caused a 2.8% drop in sales of existing homes in December and for all of sales rose 3.8%:

WASHINGTON (AP) — Americans retreated from purchasing homes in December, as the number of properties listed for sale sank to its lowest level since 1999.

The National Association of Realtors said Tuesday that sales of existing homes fell 2.8 percent last month to a seasonally adjusted annual rate of 5.49 million. For all of 2016, sales posted an annual gain of 3.8 percent to 5.45 million.

But the housing market has become trapped by a supply shortage that has pushed prices higher and may limit the potential for additional sales growth. Homebuyers simply have fewer choices, as new construction has yet to meet demand and existing homeowners have been reluctant to list their properties for sale.

"Home buying is likely to face additional headwinds going forward, which include low inventory levels, rebounding prices and higher mortgage rates," said Admir Kolaj, an analyst at TD Bank, who added that these factors are unlikely to "completely derail" the housing market.

Just 1.65 million homes were listed for sale in December. This marks a 6.3 percent drop from a year ago to the smallest total since 1999.

The tight supplies pushed the median sales price to $232,200 last month, up 4 percent from a year ago.

Homebuyers were able to manage the rising sales prices in part because of low mortgage rates in 2016, but those rates have climbed upward and settled above 4 percent since Donald Trump's presidential victory. The financial markets expect that Trump will try to stimulate economic growth through deficit spending, which caused the rates to rise on the 10-year U.S. Treasury note and mortgages.

The Realtors estimate that rising mortgage rates in recent months increased the typical monthly payment by $75, or $900 a year.

It's possible that rising mortgage rates are causing more people to buy homes earlier than they otherwise would in hopes of locking in lower monthly payments.

"When that activity dies down, we're not sure where the next wave of buyers is coming from," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Mortgage buyer Freddie Mac said last week that the rate on 30-year fixed-rate loans averaged 4.09 percent from 4.12 percent. That was dramatically higher than a 30-year rate that averaged 3.65 percent for all of 2016, the lowest level recorded from records going back to 1971.

In December, sales fell in the Northeast, Midwest and West, while staying unchanged in the South, according to the Realtors.

[Deleted User 8570]

4th Quarter 2016 GDP growth was 1.9%:

WASHINGTON (AP) — The U.S. economy lost momentum in the final three months of 2016, closing out a year in which growth turned in the weakest performance in five years.

The gross domestic product grew at an annual rate of just 1.9 percent in the October-December period, a slowdown from 3.5 percent growth in the third quarter, the Commerce Department reported Friday. GDP, the broadest measure of economic health, was held back by a jump in the trade deficit.

For 2016, the economy grew 1.6 percent. It was the worst showing since 2011 and down from 2.6 percent growth in 2015.

President Donald Trump has set a goal of doubling growth through an ambitious stimulus program featuring tax cuts, deregulation and higher infrastructure spending.

Private economists believe sustained annual growth rates of 4 percent will be a high hurdle to achieve given underlying trends such as slow growth in the labor market and weak productivity. However, many analysts have been boosting their forecasts believing that Trump will succeed in getting at least a portion of his program approved by a Republican-led Congress.

For the fourth quarter, the biggest factor contributing to the slowdown was a widening in the trade deficit. Exports, which had been temporarily bolstered by a surge in sales of soybeans to Latin America, retreated in the fourth quarter. Meanwhile, imports surged.

Paul Ashworth, chief U.S. economist at Capital Economics, said the slowdown in fourth quarter growth was not a cause for concern since the third and fourth quarter performances were heavily influenced by a temporary swing in exports.

"We would be wary of reading too much into the slowdown in GDP growth ... because the temporary spike in soybean exports boosted" the third quarter and subtracted from the fourth quarter, he said.

Trade cut 1.7 percentage point from growth in the fourth quarter after adding 0.9 percentage point to growth in the third quarter. A higher trade deficit subtracts from economic growth because it means more production is being supplied from abroad.

Consumer spending, which accounts for 70 percent of economic growth, slowed to still-solid growth of 2.5 percent in the fourth quarter from a 3 percent gain in the third quarter. But business investment spending accelerated in the fourth quarter, rising at a 2.4 percent rate, the best showing in more than a year. That's a hopeful sign that a prolonged slowdown in investment spending, reflecting in part big cuts by energy companies, is coming to an end.

Residential construction, which had been falling for two quarters, rebounded in the fourth quarter, rising at an annual rate of 10.2 percent while government spending grew at a 1.2 percent rate as strength in state and local activity offset a drop in activity at the federal level.

Rebuilding of business stockpiles added 1 percentage point to growth in the fourth quarter. The cutbacks in business investment along with efforts by companies to reduce an overhang of unwanted inventories were major reasons growth slowed in 2016.

Economists are forecasting a better performance in 2017, with many raising their forecasts to incorporate the potential impact of Trump's stimulus program. They believe that the prolonged reduction in stockpiles has run its course and business spending on new plants and equipment will begin to rebound.

Economists at the International Monetary Fund last week boosted their outlook for U.S. GDP to 2.3 percent this year and 2.5 percent in 2018, saying the increase reflected expectations that Trump's economic program of tax cuts, regulatory relief and higher infrastructure had boosted growth prospects.

Some private economists are even more optimistic. Stuart Hoffman, chief economist at PNC, said he had pushed his outlook up to growth of 2.4 percent in 2017 and 2.7 percent in 2018.

Sung Won Sohn, an economics professor at California State's Martin Smith School of Business, said there is a lot of uncertainty at the moment about Trump's program since the new administration has yet to put forward its plan for Congress to consider.

"At the moment, we don't know the size, the scale and the timing of the Trump program," Sohn said. "But it is very possible that we will get a significant boost to economic growth in the second half of next year if Trump is successful getting his program through Congress."

Sohn predicted growth rates could jump to 3.5 to 4 percent. GDP growth has averaged a lackluster 2.1 percent in the 7½ years since the recession ended, a point that Trump repeatedly brought up during the campaign.

[Deleted User 8570]

Business Spending and Durable Goods Orders rose for a third straight month in December:

WASHINGTON (AP) — U.S. businesses ramped up their investment in industrial machinery, semiconductors and other big-ticket items last month, boosting demand for factory goods.

A measure that tracks business spending plans climbed 0.8 percent in December, after jumping 1.5 percent the previous month, the Commerce Department said Friday.

Orders for all durable goods, which are meant to last longer than three years, slipped 0.4 percent, mostly because of a sharp fall in demand for defense aircraft, a volatile category. Excluding transportation-related goods, orders rose 0.5 percent, the sixth straight increase.

The report adds to recent evidence that manufacturers are climbing out of a roughly two-year rut. A strong U.S. dollar and falling oil and gas prices had sliced demand for factory products, as drillers ordered less steel pipe and other equipment. Yet demand has risen since oil prices have stabilized.

Orders for industrial machinery rose 0.4 percent last month, while demand for computers, semiconductors and electronic goods jumped 2.4 percent. Orders for autos climbed 2 percent, a sign automakers expect additional sales growth.

Other measures of the U.S. manufacturing sector have also improved. A private survey earlier this month found that manufacturing activity in December rose to its highest level in two years, led higher by strong increases in new orders and production.

And manufacturing output rose 0.2 percent in December, according to a report from the Federal Reserve. Auto sales reached a record level in 2016, and automakers continued cranking out vehicles through the end of the year.

Still, manufacturing has not yet fully rebounded. Manufacturing output rose just 0.2 percent in all of 2016, according to the Fed.

And business investment in long-lasting goods fell 3.4 percent last year, despite the gains of the last three months.

[Deleted User 8570]

Pending home sales rose in December:

WASHINGTON (AP) — More Americans signed contracts to buy homes in December. The increase possibly reflects more people scrambling to purchase homes as mortgage rates have been rising and increasing the costs of ownership.

The National Association of Realtors said Monday that its seasonally adjusted pending home sales index rose 1.6 percent to 107.3, a slight rebound after declining in November. Pending sales rose in the West and South but dipped in the Northeast and Midwest.

Mortgage rates began to surge after Donald Trump's presidential win in November. Average 30-year fixed rate mortgages were 4.19 percent last week, after averaging a low 3.65 percent for all of 2016.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

In terms of completed sales of existing homes, buying activity dipped in December as the number of available homes for sale fell to their lowest level since 1999. The inventory squeeze has caused prices to rise and potentially led more people to sign contracts in December out concerns that the number of listings could keep dropping.

The Realtors said last week that sales of existing homes fell 2.8 percent last month to a seasonally adjusted annual rate of 5.49 million. For all of 2016, sales posted an annual gain of 3.8 percent to 5.45 million.

Only 1.65 million homes were listed for sale in December, a 6.3 percent decline from a year ago.

[Deleted User 8570]

Consumer Spending rose 0.5% in December:

WASHINGTON (AP) — Consumers boosted spending in December at the fastest pace in three months, giving the economy some momentum going into 2017.

Consumer spending advanced 0.5 percent in December, a major improvement over the modest 0.2 percent gain in November, the Commerce Department reported Monday. It was the best showing since spending jumped 0.7 percent in September. The increase was driven by a 1.4 percent surge in spending on durable goods, long-lasting items such as autos.

Incomes also showed some improvement, rising by 0.3 percent in December, spurred by a rebound in growth in wages and salaries.

Consumer spending is closely watched since it accounts for 70 percent of economic activity. Overall growth had slowed to a weaker-than-expected 1.9 percent gain in the October-December quarter because of a slump in exports. But economists are looking for a rebound in the current quarter.

A key measure of inflation closely watched by the Federal Reserve edged up 0.2 percent in December and over the past 12 months has risen 1.6 percent. That is the largest 12-month gain in more than two years. But it is still below the Fed's target of 2 percent annual increases in inflation.

The central bank last month boosted its key interest rate by a quarter-point to a still-low range of 0.5 percent to 0.75 percent but projected that it could raise rates by three times this year as inflation rises further.

The 0.3 percent rise in incomes reflected a 0.4 percent gain in the key category of wages and salaries. Wages and salaries had actually fallen 0.1 percent in November.

With spending outpacing income growth in December, the saving rate dropped to 5.4 percent of after-tax incomes, down from 5.6 percent in November. It was the lowest saving rate since March 2015.

Economists believe that consumer spending will show solid gains in 2017, reflecting strong labor markets with unemployment down to near a nine-year low of 4.7 percent in December.

[Deleted User 8570]

Home prices rose 5.3% in November:

WASHINGTON (AP) — U.S. home prices marched steadily higher in November, pushed up by healthy demand for homes and a shrinking supply of available properties.

The Standard & Poor's CoreLogic Case-Shiller 20-city home index, released Tuesday , rose 5.3 percent, slightly faster than October's gain of 5.1 percent.

So far, home sales have remained healthy even as mortgage rates have risen, suggesting homebuyers are trying to lock down purchases before rates increase further. Americans bought existing homes at the fastest pace in nearly a decade in November. Yet the number of homes for sale has fallen to a 17-year low, fueling bidding wars in many cities.

Prices in Seattle jumped 10.4 percent in November from a year earlier, the biggest gain among the 20 cities tracked by the index. Portland followed with a 10.1 percent gain. Denver reported an 8.7 percent increase.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The November figures are the latest available.

Svenja Gudell, chief economist at housing data provider Zillow, said some relief from higher prices may be on the horizon. Rising mortgage rates and a leveling off of rents in many cities could cool demand for homes in the coming months, potentially slowing price gains.

The flattening of rents could also encourage developers to build more single-family homes rather than apartment buildings, which would provide more choices to potential buyers.

"These emerging trends could start impacting the market in time for the busy spring and summer home shopping season, and bear watching," Gudell said.

Sales of both new and existing homes slipped in December after posting solid gains in November. But the number of Americans signing contracts to buy homes climbed last month, a sign that sales may soon increase. A signed contract is usually followed a month or two later by a closed sale.

Steady job growth and modest wage gains have helped fuel a rebound in home sales and prices following the housing bust that began in late 2006. Home prices nationwide began to rebound in 2012 and by some measures fully recovered to their pre-recession levels in September.

Low mortgage rates have been critical to the recovery. The average 30-year fixed mortgage fell below 4.5 percent in 2011 and averaged just 3.65 percent for all of last year. They have risen since the election as investors have pushed up interest rates on expectations of faster growth.

The 30-year fixed averaged 4.19 percent last week, mortgage buyer Freddie Mac said, up from 4.09 percent the week before.

[Deleted User 8570]

For the October thru December quarter wages rose 0.5% and benefits rose 0.7%:

WASHINGTON (AP) — Wages and benefits paid to U.S. civilian workers grew at a steady pace during the final three months of 2016.

The Labor Department said Tuesday that total compensation rose 0.5 percent from October through December, a tad slower than 0.6 percent growth in the July-September period. Wages and salaries increased 0.5 percent, benefits 0.4 percent.

In the 12 months that ended Dec. 31, compensation increased 2.2 percent, up from an annual gain of 2 percent a year earlier.

The report — known as the Employment Cost Index — has shown improvement as more Americans are finding jobs and the unemployment rate has fallen to 4.7 percent. Still, the pace of income growth suggests that employers have yet to face pressure to raise wages significantly because there are too few people searching for work, said Richard Moody, chief economist at Regions Financial.

"While wage growth as measured by the ECI has accelerated modestly over recent quarters, it nonetheless remains below the pace of growth that would be seen in a fully healthy labor market," Moody said.

Wages and salaries, which account for 70 percent of compensation, were up 2.3 percent in the fourth quarter from a year earlier, and benefits rose 2.1 percent.

Among the sectors that recorded the largest compensation gains in the fourth quarter were management, transportation and warehousing and aircraft manufacturing.

Over the past 12 months, state and local government workers have seen their compensation rise at a faster rate than workers in the private sector largely because of increases in benefits.

[Deleted User 8570]

U.S. Factories expanded at the fastest pace since 2014 in January:

WASHINGTON (AP) — American factories grew last month at the fastest pace in more than two years.

The Institute for Supply Management says its manufacturing index came in at 56.0 in January, up from 54.5 in December and highest since November 2014's 57.6. Anything above 50 signals growth. Manufacturing has now grown for five straight months and for 10 of the last 11 months.

Factories said new orders, production and hiring grew faster in January. Exports grew last month but at a slower pace than they did in December.

Factories have been expanding despite a strong U.S. dollar, which makes American products more expensive in overseas markets. They also have recovered from big cutbacks in the energy industry, which reflected low oil prices.

[Deleted User 8570]

Construction Spending dropped 0.2% in December after hitting a decade high in November:

WASHINGTON (AP) — U.S. builders trimmed spending slightly in December as a gain in private projects was offset by a big drop in spending on government projects.

The Commerce Department says construction spending fell 0.2 percent after hitting the highest point in more than a decade in November. Spending on private projects actually kept rising in December, climbing by 0.2 percent. But government activity fell 1.7 percent, reflecting cutbacks at the state and local level.

The strength last month came in housing construction, which jumped 0.5 percent with gains in single-family homes and apartments. Spending on nonresidential activity was flat as spending on hotels, factories and transportation projects all declined.

Economists are looking for housing construction to be a key sector supporting overall economic growth in 2017.

[Deleted User 8570]

The ADP employment Survey for January shows 246,000 jobs were added. This includes 15,000 in manufacturing, 63,000 in retail/shipping/utilities, 8000 in professional and technical services and 25,000 in construction. The economy grew at 1.6% for 2016 and hasn't reached 3% growth for a full year since 2005:

WASHINGTON (AP) — U.S. companies ramped up hiring in January, adding the most new workers since June, according to a private survey.

Payroll provider ADP said Wednesday that businesses added 246,000 jobs last month, up from 151,000 in December. The hiring was widespread, with the construction, manufacturing, health care and shipping industries all adding jobs at a solid pace.

The figures suggest that job gains have accelerated after a sluggish patch in the second half of last year. With the unemployment rate already low, at 4.7 percent, employers may be forced to offer higher pay to attract workers, which could create broader income growth.

The ADP data cover only private businesses and often diverge from official figures. Economists forecast that the government's jobs report, due Friday, will show a gain of 175,000, according to data provider FactSet.

That figure may rise in the aftermath of the ADP report. Ted Wieseman, an economist at Morgan Stanley, boosted his forecast for the government's jobs report to 220,000 from 205,000. Wieseman also noted that fewer people have sought unemployment benefits this month, a proxy for layoffs.

"Every business survey released since the election ... has been much stronger, including rising hiring plans," Wieseman said. "Fewer people being fired and businesses potentially starting to increase new hires points to better net job growth."

Manufacturers added 15,000 jobs, the most in more than two years, ADP's report said. Other measures of manufacturing output have indicated that factories have largely rebounded from headwinds such as the strong dollar and slower overseas growth that had caused steady job losses for nearly two years.

Construction companies added 25,000 jobs, the most in four months, a figure that may have been lifted by warmer than usual weather.

Professional and technical services, which include highly-paid positions such as engineering and architects, added a more modest 8,000 jobs. Retailers, shipping firms and utility companies gained 63,000.

The economy is expanding, though at a modest pace. It grew 1.9 percent in the final three months of last year, and growth was just 1.6 percent for the full year, the slowest calendar-year performance in five years.

The economy hasn't grown at a healthy pace of 3 percent or more since 2005. President Donald Trump has pledged to lift growth to 4 percent and accelerate job creation, through tax cuts, deregulation and greater spending on infrastructure.

[Deleted User 8570]

227,000 jobs in January and 4.8% unemployment, up from 4.7%...

WASHINGTON (AP) — U.S. employers stepped up hiring last month, adding a healthy 227,000 jobs, and more Americans began looking for work, a sign that President Donald Trump has inherited a robust job market.

January's job gain was the best since September, and it exceeded last year's average monthly gain of 187,000, the Labor Department said Friday.

The unemployment rate ticked up to a still-low 4.8 percent from 4.7 percent in December. But the rate rose for an encouraging reason: More Americans started looking for work, though not all of them found jobs immediately. The proportion of adults who are either working or looking for work reached its highest point since September.

"The increase in the unemployment rate came about from both more people working and more people looking for work — a positive," said Gus Faucher, an economist at PNC.

Yet some of the economy's softness remains: Average hourly wages — a weak spot since the Great Recession ended 7½ years ago — barely rose last month. And the number of people working part time who would prefer full-time work rose.

January's jobs figures reflect hiring that occurred mainly before Trump was inaugurated on Jan. 20. Still, it was the first employment report to be released with Trump occupying the White House, and he seems sure to take a close interest in it.

As a candidate, Trump frequently argued that the government's jobs data exaggerated the health of the economy. He called the unemployment rate a "hoax" and said it declined after the recession under President Barack Obama mainly because many Americans stopped working or looking for work.

The biggest factor in that trend has been widespread retirements by the vast generation of baby boomers. But in addition, many Americans of working age, particularly men with no more than a high school degree, have also stopped looking for work.

January's solid job gain coincides with other data suggesting that the economy might be picking up after a sluggish 2016. Consumers are more confident and spending more, manufacturers are producing more goods and home sales stand at mostly healthy levels.

The rise in part-time work lifted an alternative gauge of unemployment — one that also includes involuntary part-time workers and people no longer looking for work — from 9.2 percent to 9.4 percent.

Last month's hiring ranged across most industries, and in some cases the gains might have reflected weather and other seasonal quirks. Construction companies, for example, added 36,000 jobs, the most since March. That figure might have been boosted by unseasonably warm weather in the Northeast.

Manufacturing added 5,000 jobs, its second straight gain after a string of losses in the fall.

Retailers generated 46,000 more jobs, the sharpest monthly gain in nearly a year. But that increase likely reflected imperfections in the government's seasonal adjustment process, which tries to filter out the hiring and subsequent layoff of temporary retail workers over the winter holidays. Excluding seasonal adjustments, retailers shed jobs last month, as they do nearly every January.

The proportion of Americans who were either working or looking for work in January rose to 62.9 percent from 62.7 percent in December. Before the recession began in 2007, that figure had been 66 percent.

Measures of business sentiment indicate that many employers have adopted a more positive outlook since Trump's election victory in November. The president's promised tax cuts, deregulation and infrastructure spending have increased optimism that the economy's sluggish pace of growth will pick up.

The National Federation of Independent Business said its measure of small business optimism soared 38 points in December to its highest level since 2004. And the Conference Board's consumer confidence index jumped to a 15-year high in December before dipping slightly last month.

The Federal Reserve has taken notice. It inserted a reference to the improved consumer and business outlook in a statement it issued after its policymakers met this week. The Fed left its key interest rate unchanged but struck a slightly more upbeat tone about the economy.

The possibility of further stimulus from tax cuts and infrastructure spending could quicken inflation and lead the Fed to raise rates more rapidly, some economists say.

American factories expanded last month at their fastest pace in more than two years, according to a private survey of purchasing managers. Production and new orders rose at a healthy pace. And a gauge of hiring suggested that manufacturers may have added jobs at a faster pace in January.

Businesses are also spending more on such high-priced items as industrial machinery, computers and autos, a government report last week showed.

Consumers are showing renewed health, too. They boosted their spending in December by the most in three months.

[audiophile]

Ford has cancelled building a 1.6 billion dollar truck plant in Mexico.

The production will be added in Michigan and carries 700 jobs.

The reason stated was proposed tax and regulatory reforms.

[Deleted User 8570]

Ford has cancelled building a 1.6 billion dollar truck plant in Mexico.

The production will be added in Michigan and carries 700 jobs.

The reason stated was proposed tax and regulatory reforms.

Not quite...

Ford cancelled a $1.6 billion car plant in Mexico with the production being added to an existing plant in Mexico while Flat Rock gets retooled to build lots of electric and hybrid models adding 700 jobs.

They don't build trucks in Mexico... they are profitable enough here... only small and midsize cars go south of the border...

[audiophile]

Hmmm, that was what the report said...(i heard it), but they may have messed it up!