Data Updates

Data Updates

March 2009

  • 03.27.2009
  • Personal Income
  • Nominal personal income resumed its downtrend in February, falling 2.8 percent (annualized rate), after a downwardly revised 2.1 percent gain in January. Prior to January’s blip, personal income had decreased for three consecutive months. The 12-month growth rate in personal income currently stands at 1.0 percent, down from 1.4 percent in January. Nominal disposable personal income decreased 1.2 percent in February, after an outsized 20.3 percent jump in January. After adjusting for consumer prices, “real” disposable personal income fell 5.2 percent during the month, but is still up 2.2 percent over the past year. Real personal consumption slipped down 2.1 percent in February, after an upward revision that nearly doubled January’s estimate—from a 4.6 percent increase to 8.8 percent. According to the release, consumption was bumped up due to the recent unexpected strength in the retail sales indicators. Due to the upward revision to consumption and the downward adjustment to personal income, the personal savings rate was revised down from 5.0 percent to 4.4 percent in January. In February, the personal savings rate (as a percentage of disposable income) ticked down to 4.2 percent.
  • 03.27.2009
  • PCE
  • The PCE price index jumped up 4.3 percent (annualized rate) in February and was revised up from 2.4 percent to 3.1 percent in January. However, the 12-month growth rate in PCE prices only ticked up from 0.8 percent to 1.0 percent in February. Excluding food and energy prices (core PCE), the index rose 2.9 percent during the month, accelerating over January’s 2.3 percent increase and pushing its 12-month growth trend to 1.8 percent. Prices of durable goods, nondurable goods, and services all increased in February, with prices of nondurables leading the way with a 10.9 percent jump. However, over the past 12 months, only service sector prices are trending above zero, rising 2.6 percent, while durables prices are down 1.8 percent and nondurables have decreased 1.3 percent.
  • 03.27.2009
  • Consumer Sentiment
  • Consumer sentiment was revised up in March from an index value of 56.6 to 57.3 according to the final release. While this is a 1.0 index point increase over February’s value of 56.3, its still roughly four points lower than January’s confidence reading. That said, the fact that the gains in the overall index are coming from the consumer expectations component are somewhat encouraging. Expectations were revised up from 53.0 to 53.5 in March, three points over February. However, the current economic conditions component—at 63.3—is still lower that it has been over the previous three months. Both the one-year ahead and the longer-term (five-to-ten-year ahead) average inflation expectations remained unchanged during the revision at 2.4 percent and 2.9 percent, respectively. Longer-term inflation expectations slipped 0.6 percentage point from February’s release. According to the release, “During the past five months, on average 18 percent expected outright deflation in the year ahead and another 25 percent expected a zero inflation rate; in the comparable period one year ago, just four percent expected deflation and three percent a zero inflation rate. Overall, there has not been another period in the past quarter century that deflation was more widely anticipated.”
  • 03.26.2009
  • Real GDP: Fourth-Quarter 2008 Final Estimate
  • The final estimate for real GDP in the fourth quarter of 2008 came in at -6.3 percent, 0.1 percentage point (pp) lower than the preliminary estimate and a whopping 2.5 pp below the advance estimate. The primary drivers of the extra downward revision in the final estimate were downward adjustments to private inventories, business fixed investment, and government consumption. The change in private inventories was updated to show a 0.1 pp reduction in real GDP growth, 0.3 pp lower than the preliminary estimate, and 1.4 pp lower than the advance release. Business fixed investment was adjusted down 0.1 pp from the preliminary to final release, and government consumption ticked down 0.1 pp as well. Tempering the downward adjustments was a 0.3 pp upward revision to real imports, as the decrease in imports deepened to -17.5 percent (annualized rate) from -16.0 percent (imports subtract from output in the GDP calculation, therefore a decrease in imports adds to real GDP growth). Consumption remained at a decrease of 4.3 percent in the fourth quarter, its second consecutive decrease. If consumption decreases again in the first quarter of 2009, it will be a postwar record of three quarters in a row.
  • 03.25.2009
  • Durable Goods
  • New orders for durable goods unexpectedly rose 3.4 percent (nonannualized) in February, its first increase in seven months and largest increase since December 2007. The median expectation was for a 2.5 percent decrease. Over the past 12 months, new orders are still down 23.4 percent. Excluding transportation, durable goods orders jumped up 3.9 percent in February, as orders of motor vehicles and parts fell 0.6 percent during the month. New orders of nondefense capital goods excluding aircraft spiked up 6.6 percent, following a 11.3 percent decline in January, pulling its 12-month growth rate up 5.8 percentage points to −17.8 percent. Shipments did not turn around in February, posting a 0.5 percent decrease—its seventh consecutive decrease. Inventories decreased 0.9 percent in February, after a 1.1 percent sell-off in January. That said, the inventory-to-shipments ratio still remains elevated, ticking down from 1.89 in January to 1.88 in February.
  • 03.25.2009
  • New Home Sales
  • New single-family home sales increased 4.7 percent in February following six straight declines. The increase was the twelfth since the series peaked 43 months ago (in July 2005) and the largest since April 2008. The 12-month growth rate in sales improved from −46.1 percent, its lowest level since the 1980 recession, to a −41.1 percent. The number of new homes on the market declined for the 22nd straight month, bringing the supply down to 330,000 units, roughly its average over the 30 years prior to the recent bubble. The decline in inventories mixed with the increase in the sales pace lowered the months of supply at the current sales pace from 12.9 months to a still-elevated 12.2 months. The 12-month growth rate in the median sales prices of new single-family homes declined from −11.0 percent in January to an all time low of −18.1 percent in February.
  • 03.23.2009
  • Existing Home Sales
  • Existing single-family home sales increased 4.4 percent in February, regaining much of January’s 4.7 percent loss. Over the past four months, existing single family home sales have bounced between an annual sales pace of 4.05 million units and 4.25 million units, approximately the pace homes sold at in late 1997. February’s gain brings the series’ 12-month growth rate to −3.6 percent up from −7.1 percent in January and well above the cyclical low of −21.9 percent seen in December 2007. The number of existing single-family homes for sale increased slightly in February but is still down substantially from the peak levels seen in mid-2008. Relative to the sales pace, inventories declined slightly in February but remain elevated at 9.1 months-worth of supply. The median sales price of existing single-family home, which is not seasonally adjusted, was virtually unchanged in February resulting in a 12-month growth rate of −15.0 percent, up from an all time low of −167 percent in January.
  • 03.18.2009
  • CPI
  • The CPI remained firmer than expected in February, rising at an annualized rate of 4.8 percent in February, which followed a 3.4 percent gain last month. According to the release, roughly two-thirds of the headline increase was due to a jump in gasoline prices (up 8.3 percent nonannualized). Over the past 12 months, the CPI is still up only 0.2 percent. The CPI excluding food and energy (core CPI), increased 2.3 percent during the month, outpacing all of its longer-term trends (3-,6-,12-,60-month percent changes). The Federal Reserve Bank of Cleveland’s measures of underlying inflation trends, the median and 16-percent trimmed-mean CPI, rose 2.3 percent and 2.5 percent, respectively in February. Outside the jump in gas prices, the price index for new vehicles curiously spiked up 10.1 percent (annualized rate) in February, its largest monthly increase since November 2004. Also, every subcategory of the apparel price index (except infant and toddlers apparel) rose in excess of 8.0 percent during the month, which may suggest that some retail prices are starting to rebound after deeper-than-normal discounts over the holiday season. Given the relative weak spending environment, its seems hard to view these price changes as anything other than transitory. Nevertheless, core goods prices increased 4.9 percent in February, its largest jump in nearly ten years. An investigation into the price-change distribution revealed that roughly 27 percent of the consumer market basket increased at rates exceeding 5.0 percent in February, compared to 15 percent in January and an average of 24 percent during 2008.
  • 03.17.2009
  • PPI
  • The Producer Price Index (PPI) for finished goods increased 1.4 percent at an annualized rate in February, following a 10.4 percent jump up last month that was preceded by five consecutive monthly declines. A moderation in the increase of energy prices—up 16.7 percent in February after January’s 55.1 percent increase—led to the slower rate of increase in the overall PPI. Over the past 12 months, the PPI is down 1.6 percent. Excluding food and energy prices (core PPI) the index increased 2.8 percent in February, and is up 3.9 percent over the past year. Further back on the production line prices were mixed. Core intermediate goods prices decreased 6.7 percent during the month, while core crude goods prices jumped up 19.3 percent.
  • 03.17.2009
  • Housing Starts
  • Single-family housing starts increased 1.1 percent in February, their first increase since May and largest since February 2007. While too much should not be made of one month’s worth of data, the fact that single-family starts increased after three consecutive double-digit declines is encouraging. The gain was relatively widespread across regions with only the West posting a decline in single-family housing starts. Multi-family housing starts offered more positive news as they increased by 82.3 percent nationally. While this series is considerably more volatile than the single-family series, February’s gain is still the largest increase since 1990. Combined total housing starts increased 22.2 percent in February following declines of nearly 15 percent in each of the past 3 months. Permits for single-family homes increased 11.0 percent in February the largest increase since 1991.
  • 03.16.2009
  • Industrial Production
  • Industrial production decreased at an annualized rate of 16.1 percent in February, following a downwardly revised 20.9 percent decrease in January. Over the past 12 months, industrial production is down 11.2 percent, its sharpest decline since June 1975. Production across all industries (manufacturing, mining, and utilities) waned in February. Manufacturing output decreased 8.6 percent (annualized rate) during the month, following three consecutive monthly decreases in excess of 20.0 percent. However, many motor vehicle plants came back on-line in February after an extended holiday shutdown leading to a nonannualized increase of 10.2 percent (219.2 percent annualized) in motor vehicle and parts production. Excluding the jump in autos, industrial production decreased 19.5 percent in February. The capacity utilization rate fell to 70.9 percent in February, down roughly 1.0 percentage point from January and matching the historical low for the series (which occurred in December 1982).
  • 03.13.2009
  • Consumer Sentiment
  • Consumer sentiment remained virtually unchanged in March at 56.6, compared to 56.2 in February, according to the preliminary report from the University of Michigan’s Survey of Consumers. The current conditions component slipped down 3.2 points to an index value of 62.3, while the consumer expectations actually improved to 53.0 in March from 50.5 in February. According to the release, “The majority of consumers thought the new economic policies would help to improve the economy, but the majority thought those same policies would be ineffective in improving their own financial situation.” One-year ahead average inflation expectations ticked up 0.1 percentage point to 2.4 percent in March. However, longer-run (five-to-ten-year) average inflation expectations plunged 0.6 percent points to 2.9 percent in early March, but it is still above December’s recent low of 2.6 percent.
  • 03.13.2009
  • Import Prices
  • Import prices continued to decrease in February (its seventh consecutive month), but at a much less dramatic rate, falling 2.1 percent (annualized rate). Over the past six months, import prices have decreased 37.7 percent. Recent declines have been driven in large part by rapidly falling petroleum prices, though petroleum prices reversed course in February, rising 57.8 percent during the month. Nonpetroleum import prices fell 7.4 percent in February, and are down 1.9 percent over the past year. Export prices declined 1.0 percent during the month, following a 6.4 percent gain last month. The 12-month growth rate in export prices slipped down to −4.5 percent in February from −3.6 percent last month.
  • 03.12.2009
  • Retail Sales
  • Total retail sales stumbled slightly in February, falling 0.1 percent (nonannualized), but came in above the expected −0.5 percent decline. In fact, excluding motor vehicle and parts dealers, retail sales increased 0.7 percent during the month. Over the past 12 months, total sales are still down 8.6 percent, though this is somewhat of an improvement over the current cyclical low of −10.5 percent in December. Gains were fairly widespread in February, though the leading sector was gasoline stations—sales were up 3.4 percent—and that may be a price-driven gain. Nevertheless, a core measure of retail sales (excluding autos, gas stations, and building material sales) posted an increase of 0.5 percent in February, and is actually up 0.6 percent on a year-over-year basis.
  • 03.06.2009
  • Employment Report
  • Nonfarm payrolls decreased by 651,000 in February, bringing the total employment loss since the start of the recession to 4.4 million jobs (2.6 million within the last four months). As has been the pattern for every release since December 2007, prior monthly estimates were revised down. January’s estimate was revised down from −598,000 to −655,000 and December&rsqquo;s payrolls were adjusted down to −681,000 from −577,000 (a total of 104,000). Losses were widespread, with goods-producing industries shedding 276,000 (split fairly evenly between construction and manufacturing) and service-providing employment falling by 375,000. The retail trade sector lost 39,500 jobs in February, with 13,300 in losses from motor vehicle and parts dealers. Employment in the trucking industry fell by 33,400, roughly 3.0 percent. Employment in the financial sector decreased by 44,000 in February, temporary employment services payrolls decreased by 77,000, and employment in the leisure and hospitality sector fell by 33,000. Health care employment continued to outperform, rising 26,900, but education employment showed some signs of slipping, falling 4,200 in February. Since December 2007, education and health services payrolls have risen 579,000.

    On the household side, the unemployment rate jumped up again, from 7.6 percent to 8.1 percent (more than was expected). Since October 2008, the average monthly increase in the unemployment rate has been 0.4 percentage point.

  • 03.05.2009
  • Productivity and Costs
  • Nonfarm business sector productivity (output per hour of all persons) was revised down from an annualized rate of 3.2 percent to −0.4 percent in the fourth quarter, according to the revised estimate from the Bureau of Labor Statistics. The downward revision was primarily due to a revised decrease in output from −5.5 percent to −8.7 percent in the fourth quarter, its steepest decrease since 1982:Q1. On a year-over-year basis, nonfarm business productivity was revised down from 2.7 percent to 2.2 percent, matching the third quarter’s estimate. Unit labor costs—compensation per hour divided by productivity—jumped to 5.7 percent because of the downward revision to output, increasing at its fastest pace since 2006:Q4.
  • 03.05.2009
  • Factory Orders
  • New orders for manufactured goods decreased for the sixth consecutive month, falling 1.9 percent (nonannualized) in January, following a −4.9 percent decrease in December and a −6.5 percent decline in November. The 12-month growth rate in new orders edged up from an all time low of −19.5 percent to −19.2 percent in January. Orders for nondefense capital goods excluding aircraft fell 5.7 percent in January, pulling its 12-month growth rate down to −18.8 percent. Shipments of manufactured goods decreased 1.7 percent during the month, while inventories shrank for the fifth consecutive month, falling 0.8 percent. The inventory-to-shipments ratio for manufactured goods ticked up slightly from 1.4 months to 1.5 months, its highest level since March 1996, which does not bode well for near term production.
  • 03.02.2009
  • Personal Consumption Expenditures
  • The PCE price index rose 2.4 percent (annualized rate) in January, after three consecutive monthly declines, but its 12-month growth rate still ticked down 0.1 percentage points to 0.7 percent. The PCE price index excluding food and energy prices (core PCE) rebounded from a 0.2 percent decrease in December, rising 1.4 percent in January. Durable goods prices fell 1.4 percent in January, marking their sixth consecutive monthly decline, while nondurable goods prices jumped up 7.8 percent, after posting double-digit price decreases over the three months prior. The 12-month growth rate in the core PCE now stands at 1.6 percent.
  • 03.02.2009
  • Personal Income
  • Nominal personal income unexpectedly increased at an annualized rate of 4.5 percent in January, following a decline of 2.4 percent in December. According to the release, a number of “special factors” contributed to the gain including pay increases for government workers, a $20 billion adjustment to account for lower bonus payments, and lump-sum social security benefit payments that boosted December’s personal income. Excluding these special factors, personal income would have increased 0.2 percent (nonannualized) as opposed to 0.4 percent. Over the past 12 months, personal income is up 1.9 percent. Disposable personal income—?personal income minus personal current taxes—jumped up 22.7 percent (annualized rate) in January, compared to a 2.0 percent decrease in December. After adjusting for consumer prices, real disposable income increased 19.8 percent during the month and is up 3.3 percent over the past year. The jump in disposable income was met with an increase in the personal savings rate (disposable personal income minus personal outlays) from 3.9 percent in December to 5.0 percent in January. Even with the jump in the savings rate, real personal consumption increased 4.6 percent in January, reversing most of December’s 5.9 percent decline. All the categories of consumption increased in January, but the most striking swing was in nondurable goods; they jumped 8.8 percent in January, after plummeting 20.3 percent in December. Over the past 12 months, real personal income is still down 1.6 percent.
  • 03.02.2009
  • The ISM Purchasing Managers’ Index
  • The ISM Purchasing Managers’ Index (PMI) held fairly steady in February at a value of 35.8, compared to 35.6 in January. However, according to the Institute for Supply Management, these values are still consistent with an overall contraction in the economy. A slip in the employment index (from 29.9 to 26.1) was balanced by a 4.2 point increase in the production index. The index for supplier deliveries ticked up to 46.7 in January, its highest value since November. The inventories index decreased 0.5 point to a new cyclical low of 37.0, though nowhere near the low of 24.6 during the 1973–1975 recession.