Economic Update

Thomas Montalbano, Vicky Magginas

Industrial Production
+0.6 for February
Manufacturing +0.8% Utilities -0.2% Durable goods +0.9%(2.7 percent above its year-earlier level)

returned to more normal levels of production in February

Consumer Price Index

Inflation: 0.1%

Energy: -0.5%
Medical Care:+0.3% YoY overall CPI inflation was 1.1 percent in February inflation remains quite low at the consumer level

Housing Starts
Overall Housing Starts:-0.2% for February Single-family:+ 0.3 percent after a -13.2% decrease in January. Multifamily starts:- 1.2% in February after a -7.6% percent decline the month before. Overall permits jumped 7.7 percent to after decreasing 4.6 percent in January. The increase was largely from a 24.3 percent spike in multifamily units while single-family permits eased 1.8 percent in both February and January. Housing is coming out of the severe winter weather doldrums but largely in the multifamily component.

FOMC
Federal Funds Rate - Target Level: 0- 0.25 % Leaves policy rates unchanged Still referring to weather as the primary cause for the recent weak economic data More emphasis on inflation goal and less on unemployment target

FOMC Forecasts
Economic projections released in March showed GDP growth was revised down from December (previous FOMC forecast release) but everything else remains the same.
Change in real GDP Unemployment rate 6.1-6.3% 5.6-5.9% 5.2-5.6% 5.2-5.6% PCE inflation Core PCE inflation

2014 2015 2016 Long-run

2.8-3.0% 3.0-3.2% 2.5-3.0% 2.2-2.2%

1.5-1.6% 1.5-2.0% 1.7-2.0% 2.0%

1.4-1.6% 1.7-2.0% 1.8-2.0% NA

Jobless Claims
lower-than-expected 320,000 in the March 15 week 4-week averages shows similar improvement, at 327,000 vs 338,500 Continuing claims:+ 41,000

Existing Home Sales

sales of existing homes: -0.4% YOY existing home sales: -7.1% High prices continue to be a major factor holding back sales (median price rose 0.6)