Personal Income and Outlays – Incomes in December were up 0.3% as wages and salaries grew by 0.1%. Personal incomes are up 4.6% year on year. Consumer spending was down 0.3% for the month, and it’s up 3.6% year to year. Meanwhile, inflation was down 0.2% month to month because of lower energy prices. Prices are up 0.7% year over year.
ISM Manufacturing Index – The manufacturing index for January showed a rating of 53.5, down from December’s revised figure of 55.1. This indicates that manufacturing is growing, but is doing so at a slower pace. New orders were at a level of 52.9 from the previous 57.8. Export orders also fell 2.5 points to 49.5. Backlog orders decreased 6.5 points to 46.0. Prices paid for manufactured goods also fell 3.5 points to 35.0, which is their lowest level since April 2009.
MBA Purchase Applications – Purchase applications were down 2.0%; this is the third straight weekly decline. Meanwhile, the refinance index was up 3.0%. This meant that the overall index was up 1.3%.
International Trade – The trade gap widened in December as the U.S. trade deficit increased from $39.8 billion to $46.6 billion. Exports fell 0.8% while imports were up 2.2%. Much of this is blamed on an increasingly large petroleum gap as decreasing gas prices mean fewer U.S. exports of oil. The gap increased from $11.6 billion in November to $14.7 billion.
Jobless Claims – Initial jobless claims were up 11,000 this week to a much lower than expected 278,000 jobs. Meanwhile, the four-week average decreased by 6,500 coming in at 292,750. Continuing claims rose 6,000 in the week of January 24 to 2.400 million. The four-week average is down 22,000 to 2.421 million, which is slightly higher than the stats from this time last month.
Employment Situation – Nonfarm payroll jobs were up 257,000 in January, which continued a string of strong increases. Jobs were up 86,000 in November and December. The unemployment rate went up slightly from 5.6% to 5.7%. Private payrolls were up 267,000 in January. Average hourly earnings were up 0.5% month to month.
Fixed-rate mortgages were down this week while adjustable rates were mixed.
30-year fixed-rate mortgages (FRMs) averaged 3.59% with an average 0.7 point for the week ending February 5, 2015, down from last week when they averaged 3.66%. A year ago at this time, 30-year FRMs averaged 4.32%.
15-year FRMs this week averaged 2.92% with an average 0.6 point, down from last week when they averaged 2.98%. A year ago at this time, 15-year FRMs averaged 3.40%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.82% this week with an average 0.4 point, down from last week when they averaged 2.86%. A year ago, 5-year ARMs averaged 3.12%.
1-year Treasury-indexed ARMs averaged 2.39% this week with an average 0.4 point, up from last week when they averaged 2.38%. At this time last year, 1-year ARMs averaged 2.55%.
Despite closing Friday down 60.59 points at 17,824.29, the Dow Jones Industrial Average was still up 3.8% on the week. The S&P 500 was down 7.05 points Friday to close at 2,055.47, a 3.0% week-over-week gain. The NASDAQ was down 20.70 points to finish the week at 4,744.40, a gain of 2.4% from last week.
The Week Ahead
Wednesday, February 11
MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, February 12
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims helps smooth out weekly volatility.
Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are measured by retail and food services stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Bureau of the Census.
Friday, February 13
Consumer Sentiment (10:00 a.m. ET) – The University of Michigan Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
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