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March 1, 2021

U.S. Growth Should Continue To Improve In Early 2021

 

  • Two indicators of future economic growth in the United States improved last week. The Federal Reserve Bank of Chicago’s National Activity Index rose to +0.66 in January from +0.41 in December (click here to read the report) and the Conference Board’s Leading Economic Index increased 0.5 percent in January to 110.3, following a 0.4 percent increase in December and a 0.9 percent increase in November. Click here to read that report. U.S. growth rose at a 4.1 percent annualized rate in the fourth quarter of 2020.
  • The Federal Reserve Bank of Kansas City’s manufacturing index rose to +24 in February from +17 in January even though new orders declined. The bank said the improvement was driven by durable goods plants, specifically by primary and fabricated metals, machinery, and transportation equipment. Click hereto read the full report. According to the Federal Reserve Bank of Dallas, meanwhile, the production index for the Texas region surged 15 points to 19.9, indicating a sharp acceleration in output growth. Other measures also pointed to more rapid growth, including the new orders index, which rose seven points to 13.0, and the growth rate of orders index, which rose six points to 11.6. Click here for the full report.
  • The Conference Board’s index of consumer confidence increased to 91.3 in February, up from 88.9 in January and beating economists’ expectations of 90. While the improvement was welcome, the index is still far below the 132.6 mark it hit before the COVID-19 pandemic.
  • In other economic news: personal incomes rose 10 percent in the United States from December 2020 to January 2021 while personal consumption increased 2.4 percent; sales of new homes in the United States rose 4.3 percent from December 2020 to January 2021 and 19.3 percent from January 2020 to January 2021; and the number of U.S. residents who filed for federal unemployment benefits for the first time fell to 730,000 for the week that ended February 20 from 841,000 the week before. Click here to read that report.