The MBA reports that mortgage applications fell -3.9% last week, with purchases down -2.0% and refis down -5.0%.
The Federal Open Markets Committee left short-term interest rates unchanged today, at 0% to 0.25% for the Fed Funds rate target.
In today’s economic forecast, the Fed lowered it’s forecasts for both unemployment and economic growth, noting that growth is “moderating”. The Fed’s forecasts:
2015: 2.3 to 2.7%
2016: 2.3 to 2.7%
2017: 2.0 to 2.4%
longer run: 2.0 to 2.3%
2015: 0.6 to 0.8%
2016: 1.7 to 1.9%
2017: 1.9 to 2.0%
longer run: 2.0 %
2015: 52 to 5.3%
2016: 4.9 to 5.1%
2017: 4.8 to 5.1%
longer run: 5.0 to 5.2%
Essentially, the sub-par economic growth we’ve experienced since 2009 will continue for the foreseeable future.
Redbook reports that last week’s retail sales rose to a still-weak 2.7% on a year-ago basis, from the previous week’s 2.6%.
Housing starts unexpectedly fell a sharp -17.0% in February, to a 0.897 million unit pace, which is down -3.3% on a year-ago basis. Housing numbers have generally been weak for the last few months.
The Empire State Manufacturing Survey fell from 7.78 to 6.90 in March, on softening orders.
The Fed reports that industrial production rose 0.1% in February, while capacity utilization in the nation’s factories fell -0.5% to 78.9%.
The NAHB housing market index slowed by -2 points to 53 in March.
Foreign accounts were big sellers of US long-term securities in January, as net demand for US securities fell $-27.2 billion.
The University of Michigan’s consumer sentiment index for March fell very sharply to 91.2, down 4.2 points from February.
Producer prices for final demand fell -0.5% in February. Prices ex-food and -energy were down -0.5%, as well. Prices less food, energy and trade services were unchanged. On a year-over-year basis, PPI-FD is down -0.7% overall, up 1.0% less food and energy, and up 0.7% less food, energy, and trade services.
Initial weekly jobless claims fell 36,000 to 289,000. The 4-week average 3,750 to 302,250. Continuing claims rose 13,000 to 2.417 million.
Falling auto sales drove overall retail sales down -0.6% in February. Sales less autos fell -0.1%, and sales less autos and gas fell -0.2%.
Export prices fell -0.1% in February, while import prices rose 0.4%. On a year-ago basis, prices are down -5.9% for exports and -9.4% for imports.
The Bloomberg Consumer Comfort Index fell -0.2 points to 43.3 in the latest week.
Business inventories were unchanged in January, while a -2.0% drop in sales drove the stock-to-sales ratio up to 1.35. The stock-sales ratio has been rising steadily since July, 2014.
February’s Treasury deficit was $192.3 billion, and the fiscal year-to-date deficit is 2.7% higher than February 2014 at $386.5 billion.
The Fed’s balance sheet rose $1.7 billion last week, with total assets of $4.489 trillion. Reserve bank credit rose $1.7 billion.
The Fed reports that M2 money supply fell by $-7.1 billion in the latest week.
Redbook reports that last week’s retail sales dipped to 2.6% on a year-ago basis, from the previous week’s 2.7%, as weaker sales continued.
The NFIB Small Business Optimism Index edged 1 tenth higher to 98.0 in February.
Wholesale inventories rose 0.3% in January, while a -3.1% plunge in sales drove the stock-to-sales ratio up to 1.27, the worst since July, 2009.
The labor department reports that 295,000 net new jobs were created in January, as the unemployment rate fell from 5.7% to 5.5%. The labor force participation rate slipped -0.1% to 62.8% as 178,000 people left the labor force. Average hourly earnings rose 0.1%, while the average workweek remained unchanged at 34.6 hours. The U-6 unemployment rate, the broadest measure of labor utilization, fell from 11.3% to 11%. Normally, at this point, I would calculate the “real” unemployment rate based on the historical labor force participation rate of 66.2%. Well, I’m not going to do that any more. Labor force participation has been declining steadily for the past 15 years, so I’m no longer sure what the “real” labor force participation rate should be. Below is labor force participation since 1960.
Lower oil prices narrowed the US Trade deficit from $-46.6 billion in December to $-41.8 billion in January.
Consumer credit rose $11.6 billion in January, but revolving credit fell $1.1 billion. Credit increases mainly came from auto financing and the government’s acquisition of student loans.
Chain stores are reporting roughly the same rates of year-on-year sales growth as they did in January, indicating flat sales.
Challenger’s layoff count fell to 50,579 in February vs 53,041 in January. But, the monthly average during the 4th quarter was below 40,000, so the 1st quarter’s layoff count is significantly higher.
Nonfarm productivity growth for the 4th quarter 2014 was revised down to an annualized drop of -2.2%, as unit labor costs increased 4.1%.
Factory orders fell -0.2% in January, the 6th straight decline, as a -3.1% decline in non-durable goods offset a 2.8% rise in durables. The increase in durable goods orders, however, mainly resulted from the volatile transportation sector, due to a big gain for commercial aircraft, which jumped 9.7%.
Gallup’s US Payroll to Population rate dropped slightly in February from 44.1% to 43.9%.
Initial weekly jobless claims rose 7,000 to 320,000. The 4-week average rose 10,250 to 304,750. Continuing claims rose 17,000 to 2.421 million.
The Bloomberg Consumer Comfort Index rose 0.7 points to 43.5 in the latest week.
The Fed’s balance sheet rose $0.9 billion last week, with total assets of $4.488 trillion. Reserve bank credit fell $-10.7 billion.
The Fed reports that M2 money supply rose by $43.5 billion in the latest week.