Category Archives: Economic Alert

Mild Weather Takes Toll on Production

Industrial production slipped another 0.6% in November with unusually mild winter weather adding to the toll the manufacturing sector has already been experiencing in the face of a strong dollar and an overhang of inventories. Production at utilities plants plummeted

Housing Starts Post Solid Gains

Housing starts jumped at a double-digit rate to a 1.17 million-unit, annualized rate in November following slight upward revisions to October. Gains occurred in both the multifamily and single-family

Retail Sales Sparkle

Retail sales rose 0.2% in November, broadly in line with expectations. Excluding automobiles, gasoline, building materials and food services, core sales increased 0.6%.

Manufacturing Falters, Construction Improves

The Institute for Supply Management (ISM) index dropped to 48.6% in November, affirming other evidence that the manufacturing sector is now in a contraction. Losses were fairly broad-based with the exception of employment, which moved back above the 50% threshold in November.

New Home Sales Bounce Back

In October, 495,000 new homes were sold; that increase followed a downward revision to September. Gains were broad-based with three of the four regions posting increases. The median sales price moved down from the previous month as the composition of homes sold shifted towards lower-priced properties.

Consumers Make Trade-offs

Real disposable incomes rose 0.4% in October, slightly faster than September, while inflation-adjusted spending rose a tepid 0.1% during the month, weaker than September, which was actually revised down. The saving rate picked up, but something more than caution alone appears to be happening.

Aircraft Orders Lift Durable Goods

Durable goods orders jumped a more-than-expected 3% in October, buoyed by a surge in aircraft orders for Boeing at the Dubai air show. Moreover, orders were revised up for the month of September. Nondefense and ex-aircraft orders, which more closely correlate with direct business investment, increased

Inventories Still a Problem

Real GDP was revised up to 2.1% in the third quarter from an initial estimate of 1.5%. Unfortunately, almost all of those “gains” can be attributed to larger-than-previously reported inventories, which will now have to be drained in the fourth quarter. This could further deepen holiday discounts

Housing Starts Disappoint

In October, housing starts slipped to a 1.06 million unit pace, nearly 60% below household formation. This is causing acute shortages for those looking for a place to live, particularly to rent,

Industrial Production Better than Headline

Industrial production dropped a more-than-expected 0.2% in October. All of that weakness, however, can be attributed to sharp declines in utilities and mining. Milder-than-usual autumn weather pushed down utilities, while mining and extraction continued to suffer from low prices at the gas pump.