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February 29, 2016

This Week’s Top Economic Data Points: U.S Trade Deficit Increases

  • The U.S. trade deficit increased to $43.4 billion in December from $42.2 in November as exports fell by $0.5 billion and imports increased $0.6 billion. The goods deficit rose to $62.5 billion from $61.2 billion while the services surplus increased $0.1 billion to $19.2 billion. Year-over-year, the total trade deficit was up 4.6 percent.
  • The U.S. economy expanded at a one percent annualized rate in the fourth quarter of 2015, slightly better than the 0.7 percent reading the Department of Commerce had released last month. The improved reading was due to higher private inventory investment. See the Commerce Department’s full report here.
  • Regional manufacturing readings released last week were decidedly negative. The Federal Reserve Bank of Richmond’s manufacturing reading fell to -4 in February from +2 in January as new orders, capacity utilization and shipments slowed while the Federal Reserve Bank of Kansas City reported last week that its index for the Midwest fell to -12 in February from -9 in January. The Midwest index, which was its lowest reading since 2009, reflected declines in durable and nondurable good orders and employment.
  • Consumers are feeling more pessimistic this month. The Conference Board Consumer Confidence Index fell sharply, to 92.2 in February from 97.8 in January as consumers felt more negatively about both the present economic situation and the future. The Conference Board’s Lynn Franco said, “Consumers’ short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labor market prospects. Continued turmoil in the financial markets may be rattling consumers, but their assessment of current conditions suggests the economy will continue to expand at a moderate pace in the near-term.” The University of Michigan Consumer Sentiment Index was also down slightly, dropping to 91.7 in February from 92.0 in January.
  • According to the U.S. Department of Labor (DOL), the number of individuals who filed for federal jobless benefits rose to 272,000 for the week that ended Feb. 20 from 262,000 the week before. The four-week moving average of first-time claims fell slightly, however, as did the number of individuals who continued to file for benefits. That figure dropped to 2.253 million for the week that ended Feb. 13 from 2.273 million the week before. The DOL also announced last week that unemployment rates dropped in 47 states in January, stayed the same in one state and increased in the final two. 
  • In other economic news: the number of new homes sold in the United States fell 9.2 percent from December 2015 to January 2016 and was down 5.2 percent between January 2015 and January 2016; sales of existing homes rose 0.4 percent from December to January and were up 11 percent year-over-year; and personal incomes rose 0.5 percent between December 2015 and January 2016.