Investment Remains Dismal


Durable goods orders fell 1.4% in February, after being revised down in January. Losses were driven by a correction in aircraft orders, but still more widespread than hoped. Only 3 of eleven categories posted increases: primary metals, communications equipment and appliances Read More »

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New Home Sales Buck Trend


New home sales sprang back in February, with a surge in spending on less expensive first-time buyer homes. The bulk of the increases occurred in the $200,000 to $299,000 and the $150,000 to $199,000 range. This marks a sharp shift down in price from earlier in the cycle and suggests builders are finally building less expensive homes for younger buyers. Read More »

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Inflation Remains Tepid


The consumer price index (CPI) rose 0.2% in February, with a slight uptick in prices at the pump and accelerating rents offsetting a drop in prices elsewhere in the economy. Indeed, overall inflation measures were essentially flat when compared with a year ago. The core (non-food and non-energy) measure of the CPI rose 1.7% from a year ago Read More »

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Existing Home Sales Remain Lackluster, Prices Continue to Rise


In February, existing home sales rose to a seasonally adjusted rate of 4.88 million units. Sales were only 60,000 units above last month’s pace, but are 220,000 units where we were last year. Sales fell in the Northeast as individuals were snowbound by record high snowfall. The West led with an increase of 60,000 units Read More »

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Question about consumer spending


I received this question via my Twitter account @DianeSwonk:

Is it possible that we don’t see an increase in consumer spending due to consumers increasing savings in case the economy goes sou
th?

My reply:
That is the question the Federal Reserve is asking as well; the argument against it is that consumer confidence is now very high.  There is anecdotal evidence that checking account balances are rising. Not clear why consumers are not yet spending what they save from lower gas prices. Could be hibernation with the unusually harsh winter weather across much of the nation, or trepidation about where the economy is headed.

 

 

 

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Loss of “Patience” Offset by Caution


The Federal Open Market Committee (FOMC) voted unanimously to drop “patience” with regard to its stance on short-term interest rates. The loss of the word “patience” from the statement was more than offset by a surprise in the FOMC’s verbiage that raising rates at the next meeting in April “remains unlikely.” That is in addition to a qualification in the statement that the removal of the word “patience” does not imply anything regarding the timing of the first rate increase. Read More »

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Cold Weather Hammers Housing Starts


Total housing starts for February dropped to 897,000 on an annualized basis to levels not seen since September 2013. Severe winter weather played a significant role in the drop. All regions posted declines. The Northeast and Midwest posted the worst, dropping 61,000 and 57,000 respectively from last month. On a percentage basis, these declines were even more dramatic, Read More »

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Industrial Production Disappoints


Industrial production edged up a negligible 0.1% in February, carried almost entirely by gains in utilities. Colder than usual temperatures across the country in February boosted utility usage, particularly in places that typically see more temperate conditions, in the South and West. Texas and Virginia were hit particularly hard by cold winter weather and storms during the month.

We also saw large losses in production in the oil industry Read More »

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PPI Continues to Cool Down


The Producer Price Index (PPI) for final demand fell 0.5% in February after plummeting 0.8% in January. Moreover, the bulk of those declines (70%) occurred in services as opposed to goods, which had been weighed down by falling oil prices in recent months. The decline in services was dominated by a loss in margins for wholesalers and retailers. Read More »

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Retail Sales Hit by Heavy Snow


Retail sales fell a disappointing 0.6% in February. Snow days were worse in February than in January (particularly in the South and parts of the West that don’t usually have to deal with snow). The drop in retail sales was driven by a sharp decline in vehicle sales; that also happened last year Read More »

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