Friday February 05 2016
US Trade Deficit Widens In December
BEA | Nuno |

The US trade gap widened to USD 43.4 billion in December of 2015 from a downwardly revised USD 42.2 billion in the previous month and roughly in line with expectations. Exports shrank for the third straight month while imports posted the first rise in four months. Considering full 2015, the country’s trade deficit widened 4.6 percent from 2014 as exports fell more than imports.

The December increase in the goods and services deficit reflected a rise in the goods deficit of USD 1.3 billion to USD 62.5 billion and an increase in the services surplus of USD 0.1 billion to USD 19.2 billion.

Total sales declined 0.3 percent to USD 181.5 billion, the third consecutive decline. Exports of goods decreased USD 0.8 billion to USD 121.2 billion: Automotive vehicles, parts, and engines decreased USD 0.6 billion; industrial supplies and materials decreased USD 0.4 billion, other petroleum products decreased USD 0.5 billion; foods, feeds, and beverages decreased USD 0.4 billion and soybeans decreased USD 0.2 billion. Exports of services increased USD 0.3 billion to USD 60.3 billion: financial services increased USD 0.2 billion; other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services, increased USD 0.1 billion.

Total imports edged up 0.3 percent to USD 224.9 billion, posting the first rise in four months. Imports of goods increased USD 0.5 billion to USD 183.7 billion: automotive vehicles, parts, and engines increased USD 1.0 billion; industrial supplies and materials increased USD 0.5 billion; nonmonetary gold increased USD 0.3 billion and crude oil increased USD 0.2 billion. Purchases of services increased USD 0.1 billion to USD 41.2 billion: travel (for all purposes including education) increased USD 0.1 billion and other business services increased USD 0.1 billion.

Considering full 2015, the goods and services deficit was USD 531.5 billion, up USD 23.2 billion or 4.6 percent from 2014. Exports were USD 2,230.3 billion, down USD 112.9 billion or 4.8 percent. Imports were USD 2,761.8 billion, down USD 89.7 billion or 3.1 percent.

Friday February 05 2016
US Economy Adds 151K Jobs in January
BLS | Joana Taborda |

Total nonfarm payroll employment increased by 151,000 in January of 2016, lower than a downwardly revised 262,000 in the previous month and missing market expectations of 190,000. Job gains occurred in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Employment declined in private educational services, transportation and warehousing, and mining.

Retail trade added 58,000 jobs in January, following essentially no change in December. Employment rose in general merchandise stores (+15,000), electronics and appliance stores (+9,000), motor vehicle and parts dealers (+8,000), and furniture and home furnishing stores (+7,000). Employment in retail trade has increased by 301,000 over the past 12 months, with motor vehicle and parts dealers and general merchandise stores accounting for nearly half of the gain. 

Employment in food services and drinking places rose in January (+47,000). Over the year, the industry has added 384,000 jobs.

Health care continued to add jobs in January (+37,000), with most of the increase occurring in hospitals (+24,000). Health care has added 470,000 jobs over the past 12 months, with about two-fifths of the growth occurring in hospitals.

Manufacturing added 29,000 jobs in January, following little employment change in 2015. Over the month, job gains occurred in food manufacturing (+11,000), fabricated metal products (+7,000), and furniture and related products (+3,000). 

Employment in financial activities rose in January (+18,000). Job gains occurred in credit intermediation and related activities (+7,000).

Private educational services lost 39,000 jobs in January due to larger than normal seasonal layoffs.

Employment in transportation and warehousing decreased by 20,000 in January. Most of the loss occurred among couriers and messengers (-14,000), reflecting larger than usual layoffs following strong seasonal hiring in the prior 2 months.

Employment in mining continued to decline in January (-7,000). Since reaching a peak in September 2014, employment in the industry has fallen by 146,000, or 17 percent.

Employment in professional and business services changed little in January (+9,000), after increasing by 60,000 in December. Within the industry, professional and technical services added 25,000 jobs over the month, in line with average monthly gains over the prior 12 months. Employment in temporary help services edged down in January (-25,000), after edging up by the same amount in December. 

Employment in other major industries, including construction, wholesale trade, and government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours. 

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings have risen by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33. 

The change in total nonfarm payroll employment for November was revised from  +252,000 to +280,000, and the change for December was revised from +292,000 to +262,000. With these revisions, employment gains in November and December combined were 2,000 lower than previously reported. Over the past 3 months, job gains have averaged 231,000 per month. Monthly revisions result from additional reports received from businesses since the last published estimates and the recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.

Friday February 05 2016
US Jobless Rate Drops to 4.9% in January
BLS | Joana Ferreira |

Unemployment rate in the United States dropped to 4.9 percent in January 2016, from 5 percent in the previous month, while total non-farm payroll employment increased by a lower-than-expected 151,000. The number of unemployed persons, at 7.8 million, was essentially unchanged from December.

Both the number of unemployed persons, at 7.8 million, and the unemployment rate, at 4.9 percent, changed little in January. Over the past 12 months, the number of unemployed persons and the unemployment rate were down by 1.1 million and 0.8 percentage point, respectively. 

Among the major worker groups, the unemployment rates for adult men (4.5 percent) and Whites (4.3 percent) declined in January. The jobless rates for adult women (4.5 percent), teenagers (16.0 percent), Blacks (8.8 percent), Asians (3.7 percent), and Hispanics (5.9 percent) showed little change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed. 

After accounting for the annual adjustments to the population controls, the civilian labor force and total employment, as measured by the household survey, were little changed in January. The labor force participation rate, at 62.7 percent, was little changed. The employment-population ratio (59.6 percent) changed little over the month but was up by 0.3 percentage point since October. 

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.0 million in January but was down by 796,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs. 

In January, 2.1 million persons were marginally attached to the labor force, little different from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. 

Among the marginally attached, there were 623,000 discouraged workers in January, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.

Thursday February 04 2016
US Jobless Claims Rise to 285K
DOL | Joana Ferreira |

The number of Americans filling for unemployment benefits was 285,000 in the week ended January 30th, an increase of 8,000 from the previous week's revised level of 277,000 and staying above market expectations of 280,000.

The 4-week moving average was 284,750, an increase of 2,000 from the previous week's revised average. The previous week's average was revised down by 250 from 283,000 to 282,750.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending January 23, unchanged from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending January 23 was 2,255,000, a decrease of 18,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,268,000 to 2,273,000. The 4-week moving average was 2,252,750, an increase of 5,250 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,246,250 to 2,247,500. 

Wednesday February 03 2016
US ISM Non Manufacturing PMI Falls to 2-Year Low
ISM | Joana Taborda |

The ISM Non-Manufacturing PMI index declined 2.3 percentage points to 53.5 percent in January of 2016, down from 55.8 percent in December and below market forecasts. It is the lowest reading since February of 2014 as activity, new orders, employment and prices all decreased.

The Non-Manufacturing Business Activity Index decreased to 53.9 percent, which is 5.6 percentage points lower than the seasonally adjusted December reading of 59.5 percent, reflecting growth for the 78th consecutive month at a slower rate. 

The New Orders Index registered 56.5 percent, 2.4 percentage points lower than the seasonally adjusted reading of 58.9 percent in December. 

The Employment Index decreased 4.2 percentage points to 52.1 percent from the seasonally adjusted December reading of 56.3 percent and indicates growth for the 23rd consecutive month. 

The Prices Index decreased 4.6 percentage points from the seasonally adjusted December reading of 51 percent to 46.4 percent, indicating prices decreased in January for the third time in the last five months. 

The majority of the respondents’ comments are positive about business conditions; however, there is a concern that exists relative to global conditions, stock market volatility, and the effect on commercial and consumer confidence.

The 10 non-manufacturing industries reporting growth in January — listed in order — are: Finance & Insurance; Real Estate, Rental & Leasing; Utilities; Retail Trade; Information; Construction; Agriculture, Forestry, Fishing & Hunting; Health Care & Social Assistance; Management of Companies & Support Services; and Public Administration. The eight industries reporting contraction in January — listed in order — are: Mining; Educational Services; Wholesale Trade; Other Services; Arts, Entertainment & Recreation; Accommodation & Food Services; Transportation & Warehousing; and Professional, Scientific & Technical Services.

Monday February 01 2016
US Factory Activity Shrinks for 4th Month: ISM
ISM | Joana Taborda |

The Institute for Supply Management’s Manufacturing PMI came in at 48.2 in January of 2016 compared to 48 in December. While employment and inventories subindexes declined, new orders and production grew at a faster pace and prices remained steady.

The New Orders Index registered 51.5 percent, an increase of 2.7 percentage points from the seasonally adjusted reading of 48.8 percent in December. 

The Production Index registered 50.2 percent, 0.3 percentage point higher than the seasonally adjusted December reading of 49.9 percent. 

The Employment Index registered 45.9 percent, 2.1 percentage points below the seasonally adjusted December reading of 48 percent. 

Inventories of raw materials registered 43.5 percent, the same reading as in December. 

The Prices Index registered 33.5 percent, the same reading as in December, indicating lower raw materials prices for the 15th consecutive month. 

Of the 18 manufacturing industries, eight are reporting growth in January in the following order: Textile Mills; Wood Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Furniture & Related Products; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components. The 10 industries reporting contraction in January — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Paper Products; Transportation Equipment; Plastics & Rubber Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Primary Metals; and Chemical Products.

Monday February 01 2016
US Factory Activity Growth Revised Down Slightly: Markit
Markit | Joana Taborda |

The final Markit US Manufacturing PMI came in at 52.4 in January of 2016, down from a preliminary reading of 52.7 but higher than 51.2 in the previous month. Output and new orders rose at faster pace while job creation slowed, reflecting manufacturer’s heightened uncertainty about the economic outlook. Some firms noted that the strong dollar continued to act as a growth headwind, especially in terms of export sales.

Production volumes were reported to have increased at a solid pace in January, with the rate of expansion accelerating from December’s recent low. Reports from survey respondents cited improved spending patterns, in particular from domestic clients. Reflecting this, latest data pointed to a rebound in new business growth to its fastest for three months. 

Anecdotal evidence suggested that improving U.S. economic conditions continued to boost new business volumes, although a number of manufacturers also noted that reduced capital spending across the energy sector had weighed on demand. At the same time, new export sales increased only marginally in January, with the rate of expansion slower than that recorded for total new work.

Payroll numbers expanded again at the start of the year, but the rate of job creation eased since December and was slightly slower than seen during 2015 as a whole. Some firms indicated that caution about the business outlook had held back staff hiring in January. Meanwhile, manufacturers also reported a slight drop in pre-production inventories and broadly unchanged stocks of finished goods at their plants. Growth of input buying also remained subdued, with the latest rise in purchasing activity the second-slowest recorded over the past two years.

Average cost burdens decreased for the fifth consecutive month in January, although the latest reduction was only marginal. Survey respondents noted that lower commodity prices had generally offset upward pressure on costs from higher salary payments. Factory gate charges nonetheless increased moderately in January, with the latest rise in output prices the fastest since August 2015.

Monday February 01 2016
US Personal Spending Flat, Income Up 0.3%
BEA | Joana Taborda |

Consumer spending in the United States was unchanged in December of 2015, after rising an upwardly revised 0.5 percent in the previous month and below market expectations, mainly due to lower expenditure on autos and utilities. Income went up 0.3 percent, the same as in November and above forecasts. As a result, savings hit a three-year high.

Personal income increased $42.5 billion and disposable personal income (DPI) increased $37.8 billion. Personal consumption expenditures (PCE) decreased $0.7 billion, or less than 0.1 percent. Real DPI increased 0.4 percent in December, compared with an increase of 0.2 percent in November.  Real PCE increased 0.1 percent, compared with an increase of 0.4 percent.

With income outpacing spending, savings increased to a three-year high of $753.3 billion. 

The price index for PCE decreased 0.1 percent in December, in contrast to an increase of 0.1 percent in November. The PCE price index, excluding food and energy, increased less than 0.1 percent, compared to an increase of 0.2 percent.

Year-on-year, the PCE price index increased 0.6 percent and excluding food and energy, it increased 1.4 percent.

Wages and salaries increased $13.1 billion in December, compared with an increase of $37.9 billion in November. Private wages and salaries increased $10.3 billion, compared with an increase of $35.3 billion. Government wages and salaries increased $2.8 billion, compared with an increase of $2.6 billion. Supplements to wages and salaries increased $4.8 billion in December, compared with an increase of $6.4 billion in November.

Considering 2015, personal income increased 4.5 percent, compared with a rise of 4.4 percent in 2014. PCE grew 3.4 percent, compared with an increase of 4.2 percent.

Friday January 29 2016
US Consumer Sentiment Revised Sharply Down in January
University of Michigan | Joana Taborda |

The final University of Michigan's consumer sentiment for the United States came in at 92 in January of 2016, much lower than a preliminary estimate of 93.3 and below 92.6 in December. Both current and future expectations decreased and the 1 year inflation outlook eased.

The barometer of current economic conditions came in at 106.4, compared to a preliminary reading of 105.1 and a final reading of 108.1 in December. The gauge of consumer expectations was recorded at 82.7, lower than 85.7 initially reported, but the same as 82.7 in the previous month.

Americans expect the inflation rate in the next year will be 2.5 percent, higher than a preliminary of 2.4 percent but below 2.6 percent in the previous month. Over the next 5 to 10 years, they expect consumer prices to increase 2.7 percent, unchanged from the preliminary estimate but higher than 2.6 percent in December.

Friday January 29 2016
US GDP Growth Slows to 0.7% in Q4
BEA | Joana Taborda |

The US economy expanded an annualized 0.7 percent on quarter in the last three months of 2015, lower than a 2 percent expansion in the previous period, according to the advanced estimate released by the Bureau of Economic Analysis. Figures came slightly below market expectations of 0.8 percent, as consumer spending eased, nonresidential investment shrank for the first time in nearly three years and a strong dollar and weak global demand brought exports down.

Personal consumption expenditure (PCE) contributed 1.46 percentage points to growth (2.04 percent in Q3) and rose at a slower 2.2 percent (3 percent in Q3). Spending on both durable goods (4.3 percent from 6.6 percent in Q3) and nondurable goods (1.5 percent from 4.2 percent in Q3) grew at a slower pace and consumption in services also increased less (2 percent from 2.1 percent). 

Fixed investment added a meager 0.03 percentage points to growth (0.6 percent in Q3) and expanded 0.2 percent (3.7 percent in Q3). Nonresidential investment shrank 1.8 percent, following a 2.6 percent gain in the previous period, mainly due to lower structures (-5.3 percent from -7.2 percent in Q3) and equipment investment (-2.5 percent from 9.9 percent in Q3). Residential investment increased 8.1 percent, the same as in the previous period. 

Private inventories subtracted 0.45 percentage points from the growth, lower than 0.71 percent in the previous quarter. 

Meanwhile, exports shrank 2.5 percent, after a 0.7 percent rise in the third quarter and imports rose at a slower 1.1 percent (2.3 percent in Q3), bringing the impact from trade to -0.47 percentage points (-0.26 in Q3).

Government spending and investment added 0.12 percentage points to growth, down from 0.32 percent in the third quarter. 

In 2015, the US economy advanced 2.4 percent, the same as in 2014. There were offsetting movements in the components: decelerations in nonresidential fixed investment (2.9 percent in 2015 from 6.2 percent in 2014) and in exports (1.1 percent from 3.4 percent) and an acceleration in imports (5.0 percent from 3.8 percent) were offset by accelerations in personal consumption (3.1 percent from 2.7 percent) and in residential fixed investment (8.7 percent from 1.8 percent) , a smaller decrease in federal government spending (-0.3 percent from -2.4 percent), and accelerations in private inventory investment and in state and local government spending (1.4 percent from 0.6 percent).