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In the News

Unemployment numbers hit their lowest level since February 2009, coming in at 8.5% in December, according to the U.S. Labor Department. The Department also reported that nonfarm payrolls rose by 200,000 jobs in December, thanks to private companies.
 
November’s gains were revised down slightly but October’s were revised up. December was the 15th consecutive month in which the economy has added jobs. Labor Department data show the biggest gains in transportation and warehousing, retail, manufacturing, health care and food services, most of which may be related to the holiday season.
 
Construction for November saw good news last week, increasing by 1.2 percent to hit an $807.1 billion annual rate, the Census Bureau reported. The November figure was 0.5 percent above the November 2010 estimate of $803.0 billion, and the monthly percentage growth beat analysts’ expectations by a whole percent.
 
Spending on private construction hit an annual rate of $522.3 billion in November, 1 percent above October’s revised rate of $517.3 billion. Residential construction increased to annual rate of $243.7 billion in November, a 2 percent gain over October’s revised rate of $238.9 billion.
 
Car and truck sales saw big movement in December, with U.S. auto makers selling 1.2 million cars and light trucks during the month, analysts at Autodata Corp. reported last week. This marked an 8.7 percent gain from December 2010, and in total, 2011′s tally of car and truck sales hit 12.8 million, a 10.3 percent gain over 2010. December also was the fourth consecutive month in which the sales pace rang in at more than 13 million units.
 
In manufacturing, new orders for manufactured goods in November increased by 1.8 percent to $8.2 billion following two consecutive monthly decreases, the Census Bureau reported last week. Transportation was a key growth sector, but without it new orders still increased 0.3 percent.
 
Shipments for manufacturers continued a six-month gain, increasing $0.1 billion to $455.0 billion. Unfilled orders, up 19 of the last 20 months, increased $11.1 billion or 1.3 percent to $898.3 billion. This put the unfilled orders-to-shipments ratio at 6.16, up from 6.07 in October.
 
Inventories, up 25 of the last 26 months, increased again in November by $2.8 billion, or 0.5 percent, to $609.8 billion — the highest level since the series was published in 1992. The historic gain put the inventories-to-shipments ratio at 1.34, up from 1.33 in October.
 
This week’s slate of financial news releases starts today with consumer credit data for November from the Federal Reserve. The Census Bureau follows tomorrow with the November wholesale inventories.
 
On Thursday, the Employment and Training Administration releases initial jobless claims for last week. Also on Thursday, the Census Bureau will release December retail sales data and business inventories.
 
The Bureau will follow that on Friday with November’s trade balance data and December’s export and import prices. The Treasury Department will finish up the week with the release of its December budget.

In the News

Consumer credit for September beat market expectations by expanding at an annual rate of 3.5 percent to $7.4 billion, according to the latest data released by the Federal Reserve last week. Analysts had expected consumer credit growth to hit $5 billion for the month.
 
Total consumer credit for September hit $2.45 trillion, with revolving debt (such as credit cards) decreasing to $789.6 billion for the month and non-revolving debt (such as student and car loans) increasing to $1.66 trillion.
 
September’s activity marked the third consecutive monthly drop in revolving debt, an indicator of continued consumer caution during a difficult economic recovery.
 
Looking at the wholesale sector, sales for merchant wholesalers in September increased by 0.5 percent over August to total $403.1 billion, the Census Bureau reported last week. In terms of categories, the big movers for the month were chemical and allied product sales, which increased 7.8 percent, and petroleum and petroleum products, which gained 3.9 percent.
 
Total inventories for wholesalers dropped 0.1 percent in September to $462 billion. This put September’s inventory-to-sales ratio at 1.15, slightly down from September 2010′s ratio of 1.18.
 
Foreign trade for September was encouraging, with total exports of $180.4 billion and imports of $223.5 billion resulting in a goods and services deficit of $43.1 billion, which was down from August’s $44.9 billion, the Census Bureau and the Bureau of Economic Analysis reported last week.
 
September exports were $2.5 billion more than August’s exports of $177.9 billion. September imports were $0.7 billion more than August imports of $222.8 billion.
 
Initial claims for jobless benefits filed during the week ending November 5 dropped to 390,000, a welcome decrease of 10,000 from the previous week’s revised figure of 400,000, the Employment and Training Administration reported last week. The four-week moving average was 400,000, a decrease of 5,250 from the previous week’s revised average of 405,250.
 
The total number of insured unemployed workers during the week ending October 29 dropped to 3,615,000, a decline of 92,000 from the preceding week’s revised level of 3,707,000. The four-week moving average was 3,690,250, a decrease of 19,500 from the preceding week’s revised average of 3,709,750.
 
This week’s slate of economic news starts tomorrow with October’s producer price index from the Bureau of Labor Statistics, October retail sales and September’s business inventories from the Census Bureau.
 
On Wednesday, the Bureau of Labor Statistics follows up with its October consumer price index. Also on Wednesday, the Federal Reserve releases October’s industrial production and capacity utilization figures.
 
Thursday sees initial jobless claims data from the Employment and Training Administration for last week, as well housing construction starts and building permits for October from the Census Bureau. The week closes with leading economic indicators for October from the Conference Board.

In the News

Investors had been hoping for Federal Reserve Chairman Ben Bernanke to announce a new round of Quantitative Easing in his speech at the Economic Symposium in Wyoming Friday, but only received some hints that QE3 may be in the works for the September Fed meeting.
 
“The Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting,” said Bernanke, adding, “We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September.” So, the door is still open for more Fed stimulus, but nothing set yet. Earlier this month the Fed did announce that short-term interest rates would remain near zero through 2012 and 2013.
 
Turning to the housing market, new home sales dropped to their lowest level in six months, according to the latest figures from the Census Bureau released last week. Sales of new single-family homes in July 2011 dropped to an annual rate of 298,000, the Bureau reported. This marked a 0.7 percent drop from June’s revised June rate of 300,000. That said, it was 6.8 percent above July 2010′s estimate of 279,000.
 
In terms of price, the median sales amount for new houses sold in July was $222,000, and the average sales price was $272,300. The estimate of new homes for sale at the end of July was 165,000, which represented a 6.6-month supply at the current sales rate.
 
“Without any meaningful job growth, we’re going to continue to look at a housing sector that is moribund,” Eric Green, chief market economist at TD Securities Inc., told Bloomberg.
 
Where jobs were concerned, the tough market might continue. The number of initial jobless claims for the week ending August 20 jumped by 5,000 to 417,000, according to last week’s release from the Employment and Training Administration. The four-week moving average was 407,500, an increase of 4,000 from the previous week’s revised average of 403,500.
 
However, the total number of insured unemployed workers during the week ending August 13 dropped to 3,641,000, a decrease of 80,000 from the preceding week’s revised level of 3,721,250. The four-week moving average was 3,701,000, a decrease of 19,500 from the preceding week’s revised average of 3,720,750.
 
Meanwhile, new orders for manufactured durable goods in July increased $7.7 billion or 4.0 percent to $201.5 billion, the Census Bureau reported last week. The increase followed a 1.3 percent drop in June. Excluding transportation, new orders increased 0.7 percent. Excluding defense, new orders increased 4.8 percent. The largest increase was seen by transportation equipment, which saw a $6.7 billion increase, or 14.6 percent, to $53.0 billion. This was led by non-defense aircraft and parts which increased $3.2 billion.
 
Shipments of manufactured durable goods in July, up seven of the last eight months, increased $5.0 billion or 2.5 percent to $202.2 billion. This followed a 1.1 percent June increase. However, inventories of manufactured durable goods were at an all-time high in July. Up 19 consecutive months, inventories increased $2.9 billion or 0.8 percent to $361 billion. This was at the highest level since 1992, and followed a 0.6 percent June increase.
 
This week sees a number of financial headlines, starting today with personal income and spending for July from the Bureau of Economic Analysis. This is followed tomorrow by July’s consumer confidence data from The Conference Board.
 
Wednesday the Census Bureau releases its data for July’s factory orders, and Thursday the Employment and Training Administration releases its totals for initial jobless claims for last week. Also on Thursday will be new car and truck sales for August from the auto manufacturers; July’s construction spending from the Census Bureau; and second quarter non-farm productivity and labor costs from the Bureau of Labor Statistics.
 
This week’s financial news wraps up on Friday with August’s unemployment rate, payrolls, hourly earnings and average work week from the Bureau of Labor Statistics.