Category: U.S. Economy
Update Economic USA Inflation PPI
There was a sizable increase in producer prices recently. The general trend displayed in the chart below by the red line has been indicating a gradual increase in prices. The annual rate is now at 2.5%. If the increases find their way into consumer prices, the Fed has good reason to continue with their methodical increases in bank rates.
Update Economic USA Job Creation
Job creation is an important factor in determining growth in the economy. The general trend. This is well within our forecast. The most recent report shows a nice gain moving from 177,000 to 263,000. Levels above a 200,000 gain are considered expansionary. All three size classifications improved with small enterprises adding the most. Small enterprises increased by 118,000 from a previous gain of 61,000. The unemployment rate also remains in a favorable area at 4.4%.
Update Economic USA GDP
GDP or Gross Domestic Product is one of the most important gauges of economic activity than any other variable. It is the culmination of all economic activity bundled into a single measure. This measure has also been one of the least understood and many times abused, especially during political campaigns.
Update Economic USA Housing
Housing sales of previously owned houses fell 2.3% in April to 5.57 million units, but this should not be such a surprise since the previous month reached a 10 year high. Gains over the past 12 months might be more indicative of the continuing improvement in housing with a gain of 1.6%. There is an increasing shortage of houses reflected in the most recent supply level at 4.2 months; a normal market is 6 months. The shortage is pushing median prices up and they have now reached $244,800. Given the longer trend to the upside we believe housing is still improving.
Update Economic USA Consumer Credit
Consumer debt is increasing; that is a fact. However, it has been increasing since 1980 except for a few brief periods. In the early 1990’s there was a period of zero and slight negative growth and then again in 2008 as the mortgage crisis set in. Otherwise, expansion has been the norm. Certainly, the current rate of expansion is higher than most previous time periods which leads to the question of whether or not the consumer can afford the credit outstanding? Is the consumer overextended, or is credit increasing as a result of increased income or confidence?