Consumer confidence rebounded in February following three consecutive declines, and suggests consumers are feeling better after a period of heightened market volatility and the government shutdown. However, housing activity continued to weaken in December, restrained by rising home prices.
Durable-goods orders rose in December, but core capital-goods orders fell for the fourth time in the last five months. Continued economic expansion remains the most likely path but caution is warranted.
Industrial production fell 0.6 percent in January as vehicle assemblies fell 13.7 percent. The weak report continues a string of disappointing economic data and justifies a cautious outlook. However, economic expansion remains the most likely path.
The U.S. trade deficit decreased slightly in November reflecting a smaller deficit in goods and a smaller surplus in services. Uncertainty over trade policy could restrain hiring and capital investment for some industries and threaten the broader economic outlook.
Reports from the Institute for Supply Management suggest still-solid levels of current activity with elevated levels of uncertainty regarding the future.
Sales of new single-family homes jumped 16.9 percent in November negating recent weakness, but is unlikely to be the start of a new sustained surge in housing activity.
Existing-home sales declined in December and are 12.8 percent below the November 2017 peak. Home prices, interest rates, and uncertainty are all contributing to the weakness.
Manufacturing output surged 1.1 percent for the latest month, pushing the 12-month gain to 3.2 percent and continuing a mild accelerating trend in place since 2016.
Small-business confidence and job openings fell slightly in the latest reports but both remain at high levels, providing some positive support for the economic outlook.
U.S. nonfarm payrolls added 312,000 jobs last month, the largest since February 2018. However, market volatility and uncertainty surrounding trade, fiscal, and monetary policy suggest a cautious view is warranted.
A drop in the ISM manufacturing new orders index suggests slower growth but payroll processor ADP estimates a surge in private hiring in December.
The ISM’s nonmanufacturing index rose to 60.7 in November. The increase follows the manufacturing report that also posted a gain in November. The two reports suggest slightly faster expansion for the economy last month.
The ISM PMI rose in November with broad-based gains among the components. The results suggest continued expansion for the manufacturing sector.
Real disposable income and personal consumption expenditures rose in October suggesting fourth-quarter real GDP growth is off to a strong start.
Sales of new single-family homes fell in October and the inventory of homes for sale rose, driving months’ supply to a seven-year high. With prices and interest rates rising, the outlook for housing is unfavorable.
Retail sales and initial claims data show the economy remains generally healthy. However, uncertainty around U.S. economic policies and broadening global economic risks have the potential to negatively impact the economic expansion.