About this Economic Recap
This report is a simple recap of economic statistics and events that occurred over the past week. It is notintended to portray
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Economic RecapJanuary 2013
–
Week 1
As of January 4, 2013
By DoubleLine Research
Week 1 Recap
Residential construction spending expanded by 0.4% in November, marking the eighth consecutive monthlyexpansion. Non-residential spending, on the other hand, contracted by 0.6%, still unable to string togethertwo consecutive months of growth. The overall -0.3% growth in Construction Spending was the firstcontraction in eight months. Residential spending continues to be dominated by single-family building andhome improvement, with the multi-family component making up only 8.1% of residential spending. Possiblyan indicator of the times, the largest declines in non-residential spending came from religious spending andconservation: -6.0% and -13.5%, respectively. While not experiencing contraction, Factory Orders wereexactly flat in November. Machinery saw the largest increase in this category at 3.0%, and non-defensecapital goods saw the largest decline at -2.9%.Vehicle Sales fell by a seasonally-adjusted annualized rate (SAAR) of 160,000 to 15.3 million units, which is just off multi-year highs. General Motors had an 18.2% market share, Ford at 15.5%, Toyota at 14.4%,Chrysler at 11.2%, and Honda at 9.8%.According to the Institute for Supply Management (ISM) Manufacturing Index, manufacturing continues towaver between contraction and expansion, ending December with a 50.7 expansion. Last
month’s
49.5reading was the lowest reading in more than three years. The ISM Non-Manufacturing Index continues toshow consistent strength, however, with a 56.1 figure in December. The employment subcomponentincreased from 50.3 to 56.3 over the month of December.The private firm
ADP’s
National Employment Report showed 215,000 jobs were added to private payrolls inDecember. Of these jobs 87.9% were in firms who employ over 50 people. After reporting 148,000 jobsadded in November,
December’s
figure ended 2012 on an optimistic note. Data from the Bureau of Labor
Statistics’s
(BLS’s)
Establishment Survey showed a more tepid 155,000 jobs added during the month, of which168,000 were in the private sector. These last two data points imply government payrolls continue to shrink.The household survey, which serves as the basis for the Unemployment Rate, showed 28,000 jobs wereadded and the rate stayed steady at a revised level of 7.8%. Similarly, the broader Underemployment Rateheld at 14.4%.Those currently employed saw an uptick of 1/10 an hour in Average Weekly Hours Worked in December to34.5. Average hourly earnings increased by 0.3% and are 2.1% higher than their level a year prior.
November’s
Consumer Price Index (CPI), which is the latest data available says prices over this overlappingperiod increased 1.8%.
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Economic RecapJanuary 2013
–
Week 1
As of January 4, 2012
By DoubleLine Research
Week 1 Recap continued
With mortgage rates sitting at record lows, the Mortgage Bankers Association (MBA) Mortgage ApplicationIndex contracted 10.4% during the week ending December 28
th
. The decline was broad based withrefinancing activity over this period decreasing 10.4% and applications for new purchases falling 10.5%. Newpurchases represented 18.1% of total applications and 21.1% of total dollar value during these seven days.The rate on the Fixed-Rate Mortgage (FRM) 30-year contract increased a basis point (bp) to 3.52%, and the15-year contract rate increased 2 bps to 2.86%. One year ago the 30-year rate stood at 4.07% and the 15-year rate was 3.37%.Initial Jobless Claims increased by 10,000 to 372,000 during the week ending December 29
th
. ContinuingClaims also increased to now stand at 3.25 million and Emergency Unemployment Claims fell by 30,500 to2.07 million. With the Extended Unemployment program at low levels, claims fell by 42,300, leaving only2,300 Americans supported by the program. The total number of individuals receiving some form of unemployment benefit stands at 5.32 million.
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