Category: Economics
Update Economic USA Housing
Housing has returned to the upper ranges of our forecast coming in at 1,127 while new home sales continued on a growth path reaching 667,000. Existing home sales (gold line) started moving back up again after several months of lower levels. Existing homes are struggling under low inventory and increasing prices.
Update Economic USA Industrial Production, Capacity Utilization
Industrial production continues to grow with a 0.2 point increase over last month and 1.6 points from last year. Capacity utilization moved up 0.2% to 76.0% from last month and industrial output advanced 0.1 points. This economic measurement is gradually approaching the long-term average of 79.5%.
ESP – USA Corporate Debt Issuance On Pace for Record Year, David Giordano
Excellent discussion on U.S. corporate debt by David Giodano, Director Fixed Income, S&P Dow Jones Indices, “U.S. corporations continue to take advantage of the accommodative conditions created by a protracted period of low interest rates and strong market participant demand. As of Oct. 1, 2017, U.S. investment-grade corporate debt issuance surpassed USD 1 trillion—three weeks ahead of 2016’s pace. Additionally, the amount of speculative-grade corporate debt issued through the first three quarters of 2017 is 17% higher than it was after the first three quarters of 2016. Combined, U.S. corporate issuance is on pace for another record year, which would mark the sixth consecutive year of increased corporate debt issuance.”
Update Economic USA Consumer Credit
Consumer credit took a short pause and is now showing renewed expansion without undue stress in servicing debt. Three of the credit default measures are at the same level as two years ago and the third is continuing to improve while credit expands. Credit quality is reasonable at these levels.
Update Economic USA Inflation PPI
The Federal Reserve is anxious to see some level of inflationary pressure, but unfortunately for Chairman Yellen, this does not appear to be on the horizon. Producer prices as measured by the PPI remains contained at 2.6% year-over-year (YOY), short of placing any upward pressure on the Consumer Price Index (CPI). Generally, increases in the Consumer Price Index (CPI) occur shortly after inflationary signs appear in the PPI.