Monthly Archives: January 2012
Real personal consumption expenditures (adjusted for inflation) actually declined 0.1% in December, further confirming our view that consumers remain extremely cautious about how and where they spend. This is despite a rebound in real income growth, which was driven by a rise in temporary hires, particularly in the transportation sector: 42,000 of the 200,000 job [...]
Real GDP growth disappointed, falling short of the 3.0% threshold and growing at a 2.8% rate in the fourth quarter. Sharp declines in both federal (defense spending), in addition to state and local governments, were the primary drag on growth. Both consumer spending and business investments were also more tepid than many expected.
Durable goods orders rose at a 3.0% pace in December, stronger than many had expected, and was revised up for the month of November. About a third of the gains came from a pickup in aircraft orders, which have long lead times and provide little insight into the near-term outlook for business investment. Capital goods [...]
The Federal Reserve’s shift in its statement, delaying eventual monetary tightening from “at least mid-2013″ to “at least late-2014,” is predicated on a slightly lower forecast for growth, not a recession. Indeed, Chairman Ben Bernanke said that there is room for the economy to surprise on the upside and the forecast on interest rates still [...]
The Federal Open Market Committee (FOMC) revised its statement to say that it intends to hold short-term rates at essentially zero until at least LATE-2014. That is a full 18 months later than the Federal Reserve had previously stated and more consistent with the forecast that Chairman Ben Bernanke presented at his last press conference [...]
Existing home sales rose to a 4.61 million unit rate in December, after being revised down during the previous month. Sales are up 3.6% from a year ago in December, but posted a marginal 1.7% gain for the entire year, which is stunningly weak given the pent-up demand for housing and record-low mortgage rates.
Housing starts fell from 685,000 in November to 657,000 in December. A drop in multi-family starts (largely apartments) from an elevated November pace is the primary reason for the weakness. Multi-family starts are expected to pick up again and remain the primary driver of home construction in 2012 because apartment vacancies are falling and rents [...]
The consumer price index (CPI) was unchanged in the month of December with lower prices at the pump and heavy, holiday discounting offsetting gains in shelter, recreation and medical care. Food prices also moved up slightly, but not as rapidly as we saw last summer. Cash-rich corporations had more frequent and lavish holiday parties, while [...]
Industrial production rose 0.4% in December, with robust gains in manufacturing activity offsetting a decline in utility production. This marks a sharp rebound from the downwardly-revised, 0.3% drop experienced in November and provides some hope that investment in new equipment is picking up again.
The producer price index fell 0.1% in December, as both food and energy prices dropped during the month. The largest declines were recorded in fresh and dry vegetables and prices at the pump. Core prices moved up a larger-than-expected 0.3% during the month, with a nearly a third of that rise coming from an increase [...]