Market Briefing

  • US Economy
  • Housing
  • Power Tool Industry
  • Distribution
  • Canada
  • Market Trends
  • PDF
  • US Economy
  • Housing
  • Power Tool Industry
  • Distribution
  • Canada
  • Market Trends
  • PDF

US Economy

US Economy January 2022

1/13/2022

 
Picture
All three indexes notched gains for December and record gains for the year despite economic uncertainty created by the surging Omicron variant, persistent inflation and supply chain and labor problems. Analysts’ views of the year ahead run the gamut from a continuation of the boom to the biggest decline in years.
*annual gain for 2021.
 
Consumer Spending Rises 0.6%
Consumer spending rose 0.6% in November after climbing an upwardly revised 1.4% in October. Personal incomes, which fuel consumer spending, fell 1% in September, the steepest decline in four months. Wages jumped 0.8% after rising 0.4% in August, a reflection of the tight job market and the extraordinary measures employers are taking to attract and retain workers. The economy is still being hamstrung by CV19 issues and supply chain problems. For the third quarter, consumer spending, which fuels 70% of overall economic activity, weakened to an annual growth rate of just 1.6%.
 
Consumer Prices Rise 0.8%
The Consumer Price Index (CPI) rose 0.8% in November after rising 0.9% in October and was up 6.8% year over year. Core inflation, which excludes the volatile food and energy categories, climbed 0.5% in November after rising 0.6% in October and was up 4.9% year over year, the biggest increase since 1982. Prices increased across most categories, with big jumps in groceries, gasoline, energy costs, new and used vehicles, furniture and appliances and rent. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, climbed 0.6% in November after rising 0.4% in October. The core PCE was up 4.7% year over year. The core PCE price index is the Fed's preferred measure for its 2% inflation target, which is now a flexible average. Supply chain constraints and disruptions are expected to keep inflation elevated into 2022.  
 
Consumer Confidence Rises to 115.8
Picture
  • „The New York-based Conference Board’s Consumer Confidence Index rose to 115.8 in December and the reading for November was revised up to 111.9*
  • The Present Situation Index, which is based on consumers’ assessment of current business conditions, fell slightly to 144.1 after rising to an upwardly revised 144.4 in November.
  • Expectations for the next six months rose to 96.9 in December after rising to an upwardly revised 90.2 in November. 
  • Consumer Confidence plummeted to 86.9 at the onset of the pandemic in March 2020.
*A level of 90 indicates that the economy is on solid footing; a level of 100 or more indicates growth. Analysts caution that the real driver behind consumer spending is income growth and that labor market trends are a more accurate predictor of consumer behavior.

Unemployment Falls to 3.9%
Picture
  • „The unemployment rate fell to 3.9% in December after falling to 4.2% in November. That’s the lowest rate of unemployment since the start of the pandemic when it stood at just 3.5%.
  • The economy added 199,000 new jobs, the fewest number of jobs added in any month in 2021. Job gains were well below expectations of more than 400,000. *
  • The economy added 6.4 million jobs in 2021, the most since record-keeping began in 1939.
  • The upswing in new CV19 cases will most likely impact employment in January as the rapidly spreading Omicron variant sends millions of employees into quarantine.
  • Construction jobs rose modestly in December. Transportation and warehousing added 19,000 new jobs in December and 218,000 since February 2020.
  • Average hourly wages rose 19 cents to $30.31 in December and were up 4.7% annually.
* The economy needs to create about 120,000 new jobs each month to keep up with growth in the working-age population.

Job Openings Surge
US job openings surged to 11.0 million in October after holding steady at 10.4 million at the end of September, according to the latest Job Openings and Labor Turnover Survey (JOLTS) from the US Bureau of Labor Statistics (BLS). Hiring dropped by 82,000 jobs to 6.5 million and layoffs fell by 35,000 to 1.36 million. Quits dropped by 205,000 to a still-elevated 4 million in October and the quits rate fell to 2.8% from 3.0% in September. Demand remains high and businesses continue to report that finding qualified workers is very challenging. JOLTS is a lagging indicator but is closely watched by the Federal Reserve and factors into decisions about interest rates and other measures.
 
Chicago PMI Rises to 63.1
The Chicago Purchasing Managers Index (Chicago PMI) rose to 63.1 in December after falling to 61.8 in November. It was the 18th consecutive month the index remained in positive territory. After dropping sharply in November, New Orders rose more than 8 points to 66.5. Inventories rose for the third consecutive month, reaching 62.7. Prices Paid dropped 4.2 points to a 7-month low of 85.6. Prices Paid hit a 42-year high in October. The majority of firms said their biggest problems were supply shortages, labor shortages and managing logistics. Looking back to when the series began in 1967, the PMI has ranged from 20.7 in June 1980 to 81.0 in November 1973.
               
Wholesale Prices Jump 0.8%
The Producer Price Index rose 0.8% in November after rising 0.6% in October and was up 9.6% year over year, the highest increase since the federal government started tracking this data in 2010. Core inflation, which excludes the volatile food and energy categories, rose 0.8% in November and was up 9.5% from November 2020. The prices of both goods and services went up, with rising prices for gasoline, food, iron and steel contributing to much of the increase.
 
Q3 GDP Rises 2.3%
US economic growth in the third quarter was revised up to 2.3% in the third and final reading from the Commerce Department. Growth was initially reported at 2.0% and subsequently revised up to 2.1%. The relatively weak showing was due to restrictions and other issues resulting from a resurgence of CV19 cases. The revision reflected a bit more consumer spending and business inventory investment than previously estimated. That upward revision partially offset a downward revision to exports. Economists polled by Reuters had forecast third-quarter GDP growth would be unrevised at a 2.1% pace. The economy grew at a 6.7% rate in the second quarter. Last quarter's slower pace of growth reflected the strained global supply chain and the decline in pandemic relief money.
Next Section
© Robert Bosch Tool Corporation.  All rights reserved, no copying or reproducing is permitted without prior written approval.

Comments are closed.


    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016

    Picture
    Picture
    Picture
    Picture
    Picture
    Picture
    Picture


    ​Contact Us

Powered by Create your own unique website with customizable templates.