Data Updates

Data Updates

January 2009

  • 01.30.2009
  • GDP
  • Real GDP decreased at an annualized rate of 3.8 percent in the fourth quarter of 2008. While this marks its worst quarterly performance since 1982, it is much less than the −5.5 percent that was expected. Personal consumption expenditures, which comprise roughly 70 percent of real GDP, decreased 3.5 percent in the fourth quarter, following a 3.8 percent decline in the previous quarter. Consumption subtracted 2.5 percentage points from real GDP growth, all coming from goods consumption, as services added 0.7 percentage point. The investment picture grew substantially darker in the fourth quarter, as business fixed investment plummeted 19.1 percent, compared to just a −1.7 percent decline in the third quarter. Residential investment fell 23.6 percent during the quarter, following a 16.1 percent loss in the third quarter. Private inventories rose by $6.2 billion in the fourth quarter, adding 1.3 percentage points to output growth and far exceeding its average addition to growth over the last four quarters of 0.2 percentage point. International trade seemed to fall off the map in the fourth quarter, with the largest quarterly decreases in exports and imports since 1974 and 1980, respectively. Exports plunged 19.8 percent during the quarter, while imports fell by 15.7 percent. That said, net exports actually added 0.1 percentage point to growth in the fourth quarter. The fourth quarter of 2008 saw some of the most dramatic price swings on record for the GDP chain-type price indexes. First, the PCE price index decreased by 5.5 percent in the fourth quarter, a record by far. The next closest quarterly decrease was −3.0 percent in Q1:1949 (for those who are curious, core PCE prices rose just 0.6 percent during the quarter). Also, the price indexes for imports and exports shattered previous record declines, falling 36.7 percent and 20.7 percent, respectively. For comparison, the previous record declines were −15.2 percent for imports and −9.6 percent for exports, both happening in Q:1952.
  • 01.30.2009
  • Employment Cost Index
  • The Employment Cost Index (ECI) for civilian workers increased just 1.8 percent (annualized rate) in 2008:Q4, its slowest appreciation since the first quarter of 1999. Over the past year, the ECI is up 2.6 percent. Wage and salary appreciation increased 1.8 percent, down from 3.0 percent in the third quarter. Benefits followed a similar trend, rising just 1.5 percent during the quarter.
  • 01.30.2009
  • Consumer Sentiment (January final)
  • The University of Michigan’s Index of Consumer Sentiment was revised down from 61.9 to 61.2 in January, according to the final report. The downward revision was due a negative adjustment to the current economic conditions component—from 69.2 to 66.5 for January. However this was tempered by an upward adjustment to the expectations component, rising from 57.2 to 57.8. One-year-ahead average inflation expectations remained at 2.5 percent during the revision to January’s figures, while the jump in the longer-term (five-to-ten year) average inflation expectations was dampened somewhat (from 3.7 percent in the advance estimate to 3.4 percent in the final). Still, this represents a 0.8 percentage point increase over December’s longer-run expectations of 2.6 percent.
  • 01.29.2009
  • Durable Goods
  • New orders for durable goods fell 2.6 percent (nonannualized) in December, bringing its 12-month growth rate to −21.1 percent (a record low, though the series only goes back to 1992). Orders for nondefense capital goods excluding aircraft decreased 2.8 percent during the month, pushing its 12-month growth rate down to −11.2 percent, still substantially above the low of −25.4 percent seen during the last recession. Shipments of durable goods fared somewhat better than orders in December falling only 0.8 percent, following a 4.2 percent drop in November. The 12-month trend in shipments stayed steady at −9.5 percent. Unfilled orders decreased for the third consecutive month, declining 1.3 percent in December. Inventories, on the other hand, rose for its sixteenth straight month, increasing 0.4 percent. The pace of inventory accumulation has diminished in recent months, as its 3-month growth rate of 4.6 percent (annualized) is below its year-over-year growth of 7.1 percent.
  • 01.29.2009
  • New Home Sales
  • New single-family home sales declined 14.7 percent in December, the largest monthly decline since 1994. The large decline brings the annual sales pace down to 331,000 units, its lowest level since the series began in 1963. On a year-over-year basis sales are down 44.8 percent the largest 12-month decline since the 1980 recession. Inventories of new homes for sale continued to decline in December, dropping a record 10.1 percent. However at 357,000, new single-family homes on the market inventories are still elevated. For comparison, the average level of inventory from 1980-2000 was 320,000 units. Relative to the current sales pace, inventories increased in December from 12.5 months of supply to an all-time high of 12.9 months.
  • 01.27.2009
  • Housing Price Indicators
  • The 12-month growth rate in the 10-city and 20-city composite S&P/Case-Shiller home price indexes declined in November to new lows at −19.1 percent and −18.0 percent, respectively. Both indexes have been declining on a monthly basis since June 2006. All 20 metro areas that make up the two indexes declined in November, and all twenty have negative 12-month growth rates, ranging from −32.9 percent (Phoenix) to −3.3 percent (Dallas). The FHFA monthly Purchase Only House Price Index declined in November as well, resulting a record low 12-month growth rate of −8.7 percent.
  • 01.26.2009
  • Existing Home Sales
  • Existing home sales rebounded in December as they posted a 6.5 percent increase following November’s 9.4 percent decline. On the single-family side, which is often less volatile, sales increased 7.0 percent, negating a significant portion of November’s 8.9 percent decline. Existing single-family home sales had been fairly stable for the past year until November’s large decline. December’s increase was not quite large enough to return the series to its average level over that time but it is still a welcome development. The increase in single-family sales also came with a significant decline in inventories. The number of existing single-family homes for sale declined 12.3 percent while relative to the sales pace, inventories declined from 10.6 months of supply to 8.7 months. The median sales price also declined in December falling from 179.9 thousand to 174.7 thousand. The 12-month growth rate in the median sales price is now −14.8 percent, its lowest level on record.
  • 01.22.2009
  • Housing Starts
  • Total housing starts fell 15.5 percent in December at a pace of 550,000 units annually, by far the lowest pace on record. The often less-volatile single-family starts series declined 13.5 percent following a 14.2 percent decline in November. Since peaking in January 2006, single-family starts have fallen in 28 of 35 months for a total decline of 78.2 percent. Permits for single family-homes declined 12.3 percent in December, the third consecutive month the series fell by roughly 12 percent.
  • 01.21.2009
  • International Trade
  • The nominal trade deficit decreased $16.2 billion in November to $40.4 billion as imports declined an unprecedented 12.0 percent and exports declined 5.8 percent. The majority of the massive decline in imports was in the industrial supply category, as petroleum related imports declined $13.6 billion, thanks in part to a 28.0 percent decline in oil prices. Imports of consumer goods also saw a considerable decline. Both imports and exports have fallen significantly in each of the past four months as U.S. and foreign demand for goods and services have both declined.
  • 01.16.2009
  • CPI
  • After posting a decline of 8.5 percent(annualized rate) in December, the CPI finished the year up only 0.1 percent (year–over–year basis), its lowest yearly price appreciation since 1945. This comes just months after the 12–month growth rate of the CPI was running at a 17–year high of 5.6 percent. As expected, plummeting energy prices (namely a 17 percent (nonannualized) slide in gas prices) caused much of the headline decrease in December. The core CPI was virtually unchanged during the month, falling just 0.2 percent at an annualized rate. It may be that consumers are cutting back on nonessential purchases and that drop in demand is putting downward pressure on retail prices. As evidenced in apparel prices, which decreased 10.7 percent (annualized rate) in December, as all of its components posted decreases; recreation prices fell 2.4 percent, its largest decrease in a little over nine years; and personal care prices (toiletries, perfumes, haircuts, and so on) fell 2.1 percent (its steepest decline on record though this series, in its current form, only goes back to 1999). Turning to the Federal Reserve Bank of Cleveland’s measures of underlying inflation trends, the median CPI and the 16 percent trimmed–mean rose 0.6 percent and 0.1 percent, respectively. This is a much tighter range that in previous months. The underlying price distribution shows that more than half (53 percent) of the index rose at rates less than 1.0 percent in December (with 34 percent on the index exhibiting price decreases), compared to 44 percent (with 30 percent posting outright declines) in November. On the other side of the distribution, just 24 percent of the CPI increased in excess of 3.0 percent in December, down substantially from 49 percent in November.
  • 01.16.2009
  • Industrial Production
  • Industrial production plummeted 21.5 percent (annualized rate) in December, following a downwardly revised −14.8 percent (from −7.2 percent) drop in November. Over the past 12–months, industrial production is down 7.8 percent, its worst performance since the 1974-75 recession. Manufacturing output fell 24.6 percent in December, with losses in every category of both durable and nondurable production (with the exception of a strike–related spike in aircraft production). Mining output, which had been increasing over the last two months, fell 17.2 percent in December, pulling its 12–month growth rate down to −1.0 percent. Electric and gas utilities production decreased 1.6 percent during the month, compared to 20.4 percent over the three months prior. The capacity utilization rate shed 1.6 percentage points in December to 73.6 percent of capacity, dipping below 75 percent for the first time since May 2002.
  • 01.16.2009
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment rose by 1.8 points to an index value of 61.9, up from November’s recent low of 55.3, but still ranging at levels seen during the 1980 recession. The improvement in the overall index came from a 3.2 point addition in the expectations component (a welcome sign) to 57.2. One–year–ahead average inflation expectations increased to 2.5 percent, from a recent low of 1.7 percent in December. Longer term (five–to–ten year) average inflation expectations jumped up 1.1 percentage points to 3.7 percent, while the median long–run expectations increased from 2.6 percent to 3.0 percent. Taken together, long–term inflation expectations, which had been at series lows in December, returned to a more normal range.
  • 01.15.2009
  • PPI
  • The Producer Price Index (PPI) for finished goods decreased for its fifth consecutive month, falling 20.7 percent (annualized rate) in December. The 12–month growth rate dipped to −1.2 percent in December, a dramatic decline from July’s recent high of 9.8 percent. Energy price declines continue to be the main driver of the overall decrease in the PPI. However, the PPI excluding food and energy prices increased 2.1 percent during the month, up from 1.4 percent in November, pushing its longer–term (12–month) growth rate up 0.1 percentage point to 4.3 percent. Further back on the line of production, core intermediate and core crude goods prices continued to decrease, falling 30.4 percent and 23.0 percent, respectively.
  • 01.14.2009
  • Retail Sales
  • Total retail sales came in worse than expectations, decreasing at an annualized rate of 27.7 percent in December, following downwardly revised declines of 22.8 percent in November, and 34.1 percent in October. Over the past 12 months, total retail sales have now fallen 9.8 percent. Excluding motor vehicle and parts sales, retail sales actually performed slightly worse during the month, falling 31.1 percent. Declines were widespread among major components, with only miscellaneous store retailers (gift shops, office supply stores, and so on) and pharmacies posting slight gains. One of the main causal reasons for the overall decline in sales in November was a dramatic drop in the price of gasoline. Unfortunately, this was not the case in December. An addenda measure that excludes sales at gasoline stations, building supply stores, and automotive sales—which decreased only 3.3 percent (annualized rate) in November—fell 15.3 percent in December.
  • 01.09.2009
  • Employment Report
  • Nonfarm payrolls shed just over a half a million workers in December (−524,000), bringing the payroll losses to 1.9 million over the last four months and 2.6 million for the year. November payrolls were revised down from −533,000 to −584,000. Losses in December were fairly evenly split between goods-producing and service–providing sectors, decreasing 251,000 and 273,000, respectively. Manufacturing employment fell by 149,000, with the bulk of that coming from durable goods production (−114,000). Motor vehicles and parts manufacturing decreased by 21,000 in December. Private service-providing employment declined by 280,000 in December, the losses—while substantial—are much less than the near 400,000 decline in November. Again, the bright spot on the service side was the health care sector, which hasn’t posted a monthly decrease since July 2003, and rose 31,600 in December. The average workweek for production and nonsupervisory workers fell to 33.3 hours in December, down from 33.5 hours in November to a new all–time low (the series began in 1964). On the household side, the unemployment rate jumped up 0.4 percentage point to 7.2 percent in December, as the number of unemployed workers increased by 632,000, while the civilian labor force contracted by 173,000.
  • 01.06.2009
  • Factory Orders
  • New orders for manufactured goods posted its fourth consecutive monthly decline, falling 4.6 percent (nonannualized) in November, following a downwardly revised 6.0 percent decrease in October. Over the past 12 months, new orders are down 12.2 percent. However, new orders of nondefense capital goods excluding aircraft—a leading indicator of business investment spending—increased 3.9 percent during the month, compared to a 6.7 percent decrease in October. Shipments of manufactured goods plummeted 5.3 percent in November, its worst performance on record. Over the past three months, shipments are off 11.6 percent. Both unfilled orders and inventories decreased in November, falling 0.7 percent and 0.3 percent, respectively.
  • 01.05.2009
  • Construction Spending
  • Total construction spending decreased 0.6 percent in November, bringing the series down 3.3 percent from a year ago. Total private construction spending declined 1.5 percent in November as private residential construction expenditures declined 4.2 percent over the month. The private nonresidential sector continued to show resilience increasing 0.7 percent in November. Over the past 12 months, private nonresidential spending is up 10.3 percent while the residential series has declined by 23.4 percent.