Author Archives: Diane Swonk

Construction Hit by Weather

Construction spending plummeted 1.1% in January as another relentless winter disrupted public and private sector projects alike; that was despite seasonal adjustment of the data. We experienced more weather disruptions in more places in February than January so the noise from distortions will likely get worse before it gets better. Losses were broad-based

Income Continues to Outpace Spending

Real disposable income surged 0.9% in January, extending gains that we saw at the end of 2014. Improving labor market conditions, combined with a pickup in average hourly earnings (driven in part by increases in the minimum wage) and plummeting prices at the gas pump enhanced

Inventories Less of a Problem in Fourth Quarter

Real GDP was revised down to 2.2% in the fourth quarter from an initial estimate of 2.6%. A sharp downward revision to inventories was the primary reason for the revision, which leaves less of an overhang for producers to drain in early 2015. Imports were also revised up, reflecting the phenomenal strength of consumer spending

Durable Goods Orders Rebound

Durable goods orders increased 2.8% in January, only partially offsetting two months of ugly declines. An increase in aircraft orders was the primary reason for the turnaround. Orders for nondefense aircraft and parts surged a whopping 128.5% in January. Other pockets of strength included machinery and computing equipment,

Energy Prices Pull CPI Lower

The Consumer Price Index dropped 0.7% in January but only 0.1% from a year ago. Falling energy prices were the primary reason prices fell

New Home Sales Maintain Buoyancy

New home sales came in at a 481,000-unit pace in January, nearly even with the better-than-expected showing we saw in December. Moreover, in a shift that started late last year, gains were more concentrated in lower priced homes, which took down the median and average sale price

Production Tempered by Energy Losses

The index of industrial production rose 0.2% in January, less than many had hoped after a decline of 0.3% in December. Gains in manufacturing activity, which were driven by a pickup in utilities production, were tempered by a loss in the mining sector.

Retail Sales Disappoint

Retail sales dropped 0.8% in January, due in part to yet another sharp decline (9.3%) in gasoline station sales, as prices at the gas pump continued to plummet. Big-ticket spending on vehicles, furniture and appliances also slackened from the pace we saw in December.

Employment Remains Buoyant: Participation Up

Payroll employment jumped a more-than-expected 257,000 in January, despite more than the usual number of heavy snow days across the nation.  (Yes, economists watch the weather too.) More importantly, benchmark revisions were released with strong upward revisions to November and December, underscoring the upward shift in economic momentum that we saw at the end of [...]

Forecast for the January Employment Data

Nonfarm payroll employment is expected to rise by 220,000 for the month of January, which would mark a slight deceleration from what we saw late last year. Private employment is expected to rise by 215,000 during the month. The unemployment rate is forecast to stay at 5.6% (although we’d welcome an increase if that meant [...]