Friday February 15 2019
US Consumer Sentiment Rises in February
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The University of Michigan's consumer sentiment for the US rose to 95.5 in February of 2019 from 91.2 in January, preliminary estimates showed. The early February gains reflect the end of the partial government shutdown as well as a more fundamental shift in consumer expectations due to the Fed's pause in raising interest rates.

The current economic conditions subindex increased to 110 from 108.8 in January and the gauge for consumer expectations went up to 86.2 from 79.9. Inflation expectations for the year ahead declined to 2.5 percent from 2.7 percent and the 5-year outlook dropped to 2.3 percent from 2.6 percent.

The lingering impact of the shutdown was responsible for some of the negative economic evaluations, and, at the time that these interviews were conducted, uncertainty about whether a second shutdown would occur continued to have a slight depressing impact on confidence. Although the majority of consumers expected some additional rate hikes during the year ahead, that proportion has shrunk to the smallest level in the past two years. Perhaps more importantly, consumers' long term inflation expectations fell to the lowest level recorded in the past half century. While nominal income expectations remained at modest levels, consumers more frequently expected gains in their inflation-adjusted incomes in early February than at any other time in more than fifteen years. The data indicate that personal consumption expenditures will remain the strongest sector in the national economy in 2019--up by 2.7% compared with a GDP gain of 2.2%. The data suggest that the Fed will find it even harder to justify another rate hike given the record low inflation expectations; the data will also add to the debate about the evolving relationship between unemployment and inflation as consumers now anticipate lower inflation and higher unemployment.




Friday February 15 2019
US Industrial Output Falls for 1st Time in 8 Months
Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com

US industrial output dropped 0.6 percent from a month earlier in January 2019, following a downwardly revised 0.1 percent growth in December and missing market expectations of a 0.1 percent gain.

Manufacturing production fell 0.9 percent in January, following a 0.8 percent rise in December. Within durable manufacturing, motor vehicles and parts posted the steepest contraction (-8.8 percent vs 4.3 percent in December), as vehicle assemblies fell to 10.6 million units at an annual rate in January (their lowest reading since May 2018) from 12.3 million units in December (their highest monthly pace since June 2016). Most other major durable goods industries also recorded decreases: machinery (-0.5 percent vs -1.1 percent); computer and electronic products (-1.4 percent vs 1.7 percent); aerospace and miscellaneous transportation equipment (-0.3 percent vs 2.7 percent); primary metals (-0.2 percent vs -0.3 percent); and nonmetallic mineral products (-0.8 percent vs 3.1 percent). By contrast, fabricated metal products output increased 0.4 percent after a 0.2 percent gain in the previous month. Among nondurables, declines in production of chemicals (-0.4 percent vs -0.2 percent) and food, beverage, and tobacco products (-0.1 percent vs 0.9 percent) were offset by an increase in petroleum and coal products output (1.5 percent vs 3.2 percent).

Mining output edged up 0.1 percent in January, easing from a 1.5 percent growth in the previous month. The output of utilities increased 0.4 percent (vs -6.9 percent in December), with natural gas utilities rising 6 percent after falling 19 percent a month earlier.

Capacity utilization for manufacturing declined 0.7 percentage point in January to 75.8 percent, about 2 1/2 percentage points below its long-run average. The utilization rate for mining fell to 94.8 percent but remained well above its long-run average of 87.1 percent. The operating rate for utilities increased to 75.4 percent, a rate that is about 10 percentage points below its long-run average.




Thursday February 14 2019
US Retail Sales Post Biggest Drop in Over 9 Years
US Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

US retail trade fell by 1.2 percent from a month earlier in December 2018, following a revised 0.1 percent growth in November and missing market expectations of 0.2 percent gain. It was the steepest decline in retail sales since September 2009.

11 of 13 major retail categories showed month-over-month decreases.

Receipts at gasoline stations tumbled 5.1 percent (vs -4.4 percent in November), the largest fall since February 2016, amid cheaper gasoline prices. Also, sales at hobby, musical instrument & book stores dropped 4.9 percent (vs -1.4 percent in November), the biggest drop since September 2008, and those at miscellaneous store retailers were 4.1 percent lower (vs 4 percent in November). In addition, online and mail-order retail sales slumped 3.9 percent, the biggest drop since November 2008, after a 2.8 percent growth in the previous month. Spending also decreased at: furniture & home furniture stores (-1.3 percent vs 0.5 percent); electronics & appliance stores (-0.1 percent, the same as in November); food & beverage stores (-0.4 percent vs 0.1 percent); health & personal care stores (-2 percent vs 1.3 percent); clothing & clothing accessories stores (-0.7 percent vs 0.4 percent); general merchandise stores (-0.9 percent vs 0.4 percent); and restaurants and bars (-0.7 percent, the same as in November).

Meanwhile, receipts at motor vehicle & parts dealers rose 1 percent (vs 0.7 percent in November) and those at building material stores rebounded 0.3 percent (vs -1.5 percent in November).

Excluding automobiles, gasoline, building materials and food services, retail sales dropped 1.7 percent in December after an increase of 1 percent in November. These so-called core retail sales correspond most closely with the consumer spending component of GDP.

Year-on-year, retail trade grew 2.3 percent in December, compared with a revised 4.1 percent rise in the previous month.




Thursday February 14 2019
US Jobless Claims Unexpectedly Rise in Latest Week
DOL | Agna Gabriel | agna.gabriel@tradingeconomics.com

The number of Americans filling for unemployment benefits increased by 4 thousand to 239 thousand in the week ending February 9 from the previous week’s revised level of 235 thousand. It compares with market expectations of 225 thousand.

The 4-week moving average was 231,750, an increase of 6,750 from the previous week's revised average. This is the highest level for this average since January 27, 2018 when it was 234,000. The previous week's average was revised up by 250 from 224,750 to 225,000. 

According to unadjusted data, the biggest increases were seen in Washington (+4,869); Michigan (+1,157) and Minnesota (+461) while the largest declines were reported in California (-3,112); Pennsylvania (-2,056); Ohio (-1,841) and Illinois (-1,369).

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending February 2, unchanged from the previous week's unrevised rate. 

The advance number for seasonally adjusted insured unemployment during the week ending February 2 was 1,773,000, an increase of 37,000 from the previous week's unrevised level of 1,736,000. The 4-week moving average was 1,750,250, an increase of 9,000 from the previous week's unrevised average of 1,741,250.




Wednesday February 13 2019
US Budget Deficit Larger than Expected
US Treasury | Joana Ferreira | joana.ferreira@tradingeconomics.com

The US government budget deficit narrowed to USD 14 billion in December 2018 from USD 23 billion in the same month of the previous year, above market expectations of USD 11 billion.

Outlays were down 7 percent from a year earlier and totaled USD 326 billion, with social security accounting for USD 84 billion, Medicare for USD 24 billion, defense for USD 57 billion, income security for USD 37 billion, health for USD 48 billion, net interest for USD 34 billion, veterans' benefits and services for USD 16 billion, transportation and education for USD 17 billion each and other expenses for USD 10 billion.

Meanwhile, receipts fell 4 percent to USD 313 billion, with individual income taxes accounting for USD 151 billion, social insurance and retirement for USD 95 billion, corporate income taxes for USD 47 billion, excise taxes for USD 7 billion, custom duties for USD 6 billion, miscellaneous receipts for USD 6 billion and estate gift taxes for USD 2 billion.

When taking into account calendar effects, spending was slightly higher while receipts were down 6 percent from a year earlier.




Wednesday February 13 2019
US Inflation Rate Drops to 1.6%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Annual inflation rate in the United States slowed for the third straight month to 1.6 percent in January of 2019 from 1.9 percent in December. It is the lowest rate since June of 2017, compared to market expectations of 1.5 percent, mainly due to a sharp fall in energy prices, namely gasoline.

Year-on-year, prices fell for gasoline (-10.1 pecent compared to -2.1 percent in December); fuel oil (-8.1 percent compared to 1.9 percent); and medical care commodities (-0.3 percent compared to -0.5 percent); and were unchanged for new vehicles (0 percent compared to -0.3 percent). Also, inflation slowed for transportation services (2 percent compared to 2.8 percent); medical care services (2.4 percent compared to 2.6 percent); and was flat for food (1.6 percent); and shelter (3.2 percent). On the other hand, prices rebounded for apparel (0.1 percent compared to -0.1 percent) and went up faster for used cars and trucks (1.6 percent compared to 1.4 percent); electricity (1.3 percent compared to 1.1 percent); and utility piped gas service (4.3 percent compared to 2.3 percent). 

Excluding food and energy, consumer prices increased 2.2 percent over a year earlier, the same as in December and slightly above forecasts of 2.1 percent.

On a monthly basis, consumer prices were flat for the third straight month, compared to forecasts of a 0.1 percent rise. The energy index declined for the third consecutive month, offsetting increases in the indexes for all items less food and energy and for food. All the major energy component indexes declined in January, with the gasoline index falling 5.5 percent. The food index increased 0.2 percent, with the index for food at home rising 0.1 percent and the food away from home index increasing 0.3 percent. 

The index for all items less food and energy increased 0.2 percent in January for the fourth consecutive month, matching forecasts. The indexes for shelter, apparel, medical care, recreation, and household furnishings and operations were among the indexes that rose in January, while the indexes for airline fares and for motor vehicle insurance declined.   




Thursday February 07 2019
US Jobless Claims Fall Less than Expected
DOL | Agna Gabriel | agna.gabriel@tradingeconomics.com

The number of Americans filling for unemployment benefits decreased by 19 thousand to 234 thousand in the week ending February 2 from the previous week’s unrevised level of 253 thousand. It compares with market expectations of 221 thousand.

The 4-week moving average was 224,750, an increase of 4,500 from the previous week's unrevised average of 220,250. The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 26, unchanged from the previous week's unrevised rate. 

According to unadjusted data, the largest declines were reported in California (-6,528); Florida (-1,750); New Jersey (-1,359) and Missouri (-1,230) while the biggest increases were seen in Pennsylvania (+5,038); Wisconsin (+4,576); New York (+3,853) and Texas (+1,763).

The advance number for seasonally adjusted insured unemployment during the week ending January 26 was 1,736,000, a decrease of 42,000 from the previous week's revised level. The previous week's level was revised down by 4,000 from 1,782,000 to 1,778,000. The 4-week moving average was 1,741,250, an increase of 4,250 from the previous week's revised average. The previous week's average was revised down by 750 from 1,737,750 to 1,737,000.

Initial claims for UI benefits filed by former Federal civilian employees totaled 6,669 in the week ending January 26, a decrease of 8,070 from the prior week. 

There were 538 initial claims filed by newly discharged veterans, a decrease of 77 from the preceding week. There were 57,389 former Federal civilian employees claiming UI benefits for the week ending January 19, an increase of 17,277 from the previous week. Newly discharged veterans claiming benefits totaled 7,866, an increase of 1,171 from the prior week.


Wednesday February 06 2019
US Trade Gap Lowest in 5 Months
BEA | Joana Taborda | joana.taborda@tradingeconomics.com

The U.S. trade deficit narrowed to USD 49.3 billion in November of 2018 from an upwardly revised USD 55.7 billion in the previous month and compared with market expectations of a USD 54 billion gap. It is the lowest deficit in five months as imports plunged the most since March of 2016 from a record high value reached in the previous month.

Total exports edged down 0.6 percent month-over-month to USD 209.873 billion. Exports of goods decreased USD 1.2 billion to USD 140.3 billion, mainly due to falls in shipments of industrial supplies and materials (USD -1.4 billion), namely other petroleum products (USD -0.6 billion) and nonmonetary gold (USD -0.5 billion); consumer goods (USD -0.9 billion), namely gem diamonds (USD -0.5 billion) and pharmaceutical preparations (USD -0.4 billion). On the other hand, sales rose for capital goods (USD 1.4 billion), namely civilian aircraft (USD 1 billion). Exports of services decreased USD 0.1 billion to USD 69.5 billion as financial services went down USD 0.1 billion.

According to unadjusted data, exports fell to China (-5.1 percent), Canada (-4.7 percent), Mexico (-6.9 percent), the EU (-3.2 percent) and Brazil (-25.2 percent) but rose to Japan (4.2 percent) and OPEC (15.3 percent).

Total imports slumped 2.9 percent to USD 259.186 billion from a record high of USD 266.881 reached in October. Imports of goods decreased USD 7.9 billion to USD 211.9 billion, mainly due to consumer goods (USD -4.3 billion), namely cell phones and other household goods (USD -2.3 billion) and artwork, antiques, stamps, and other collectibles (USD -0.4 billion); industrial supplies and materials (USD -3.4 billion), namely other petroleum products (USD -1.4 billion), fuel oil (USD -0.8 billion) and crude oil (USD -0.7 billion). On the other hand, imports of services increased USD 0.2 billion to USD 47.3 billion: travel (for all purposes including education) went up USD 0.3 billion while insurance services decreased USD 0.1 billion.

According to unadjusted data, imports declined from all main partners: China (-10.9 percent), Canada (-9.1 percent), Mexico (-6.9 percent), the EU (-7.4 percent), Japan (-0.8 percent), Brazil (-24.8 percent) and OPEC (-12.1 percent). 

The goods deficit with China declined to USD 37.9 billion from a record high of USD 43.1 billion in October. The trade gap also narrowed with all remaining main partners: EU (USD 15.1 billion from USD 17.6 billion), Mexico (USD 6.7 billion from USD 7.2 billion), Japan (USD 5.8 billion from USD 6.2 billion), OPEC (USD 0.8 billion from USD 2.5 billion; data now excludes Qatar) and Canada (USD 0.7 billion from USD 2 billion).

Considering the first eleven months of 2018, the goods and services deficit increased USD 51.9 billion, or 10.4 percent, from the same period in 2017. Exports rose USD 157.1 billion or 7.3 percent. Imports went up USD 208.9 billion or 7.9 percent.





Tuesday February 05 2019
US Services Growth Slows for 2nd Month: ISM
ISM | Joana Taborda | joana.taborda@tradingeconomics.com

The ISM Non-Manufacturing PMI index for the United States fell to 56.7 in January of 2019 from 58 in December and below market expectations of 57.2. The reading pointed to the weakest expansion in the services sector in six months. While respondents showed concerns about the impacts of the government shutdown they remain mostly optimistic about overall business conditions.

Slower growth was seen in business activity (59.7 from 61.2), new orders (57.7 from 62.7), and new export orders (50.5 from 59.5). Also, inventories contracted (49 from 51.5) and price pressures intensified (59.4 from 58). On the other hand, employment (57.8 from 56.6) and backlog of orders (52.5 from 50.5) rose faster. 

The 11 non-manufacturing industries reporting growth in January — listed in order — are: Transportation & Warehousing; Health Care & Social Assistance; Mining; Accommodation & Food Services; Wholesale Trade; Finance & Insurance; Utilities; Real Estate, Rental & Leasing; Construction; Professional, Scientific & Technical Services; and Public Administration. Seven non-manufacturing industries reported contraction in January in the following order: Retail Trade; Educational Services; Information; Agriculture, Forestry, Fishing & Hunting; Arts, Entertainment & Recreation; Management of Companies & Support Services; and Other Services.




Friday February 01 2019
US Factory Growth Beats Forecasts: ISM
ISM | Joana Taborda | joana.taborda@tradingeconomics.com

The ISM Manufacturing PMI in the US jumped to 56.6 in January of 2019 from an upwardly revised 54.3 in December, easily beating market expectations of 54.2. Faster increases were seen in new orders, production and inventories while employment slowed slightly. On the other hand, exports continued to expand, but at the lowest level since the fourth quarter of 2016 and prices contracted for the first time since the first quarter of 2016. The manufacturing sector continues to expand, reversing December’s weak expansion, but inputs and prices indicate fundamental changes in supply chain constraints.

Faster increases were seen in new orders (58.2 from 51.3 in December), production (60.5 from 54.1), inventories (52.8 from 51.2) and backlogs of orders (50.3 from 50). On the other hand, slowdowns were seen in employment (55.5 from 56), supplier deliveries (56.2 from 59) and new export orders (51.8 from 52.8). Also, prices fell (49.6 from 54.9) and customers’ inventories were too low (42.8 from 41.7).
 
Of the 18 manufacturing industries, 14 reported growth in January, in the following order: Textile Mills; Computer & Electronic Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Furniture & Related Products; Printing & Related Support Activities; Primary Metals; Chemical Products; Transportation Equipment; Machinery; Fabricated Metal Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components. The only industry reporting contraction in January is Nonmetallic Mineral Products.