Consumer sentiment improved in early March, maintaining a generally high level by historical comparison. The tight labor market remains one of the key supports for consumer sentiment.
New single-family home sales fell 6.9 percent in January. Slowing sales and rising inventory are weighing on new construction, suggesting new-home construction is unlikely to contribute significantly to economic growth in coming quarters.
Retail sales growth bounced back in January, but economic data continue to be mixed, suggesting a heightened degree of caution for the economic outlook.
U.S. nonfarm payrolls added just 20,000 jobs in February, the smallest monthly gain since September 2017. Combined with other recent disappointing economic data, the report raises concerns about the durability of the economic expansion.
The ISM’s nonmanufacturing index rose to 59.7 in February. The increase was led by strong performances by the activity index and the new orders index. The report suggests continued expansion for the economy last month.
The Manufacturing Purchasing Managers’ Index from the Institute for Supply Management registered a 54.2 percent reading in February. Despite a small decline, the index remains above neutral—a positive sign for the manufacturing sector.
Real gross domestic product rose at a 2.6 percent annualized rate in the fourth quarter, putting the calendar year growth at 2.9 percent, the fastest pace since 2015. Consumer prices rose 1.5 percent in the quarter, putting the calendar year increase at 2.0 percent, the fastest since 2011, and the seventh year in a row with a pace of two percent or less.
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.