The U.S. economy lost some of its spark in October. Here are the five things we learned from U.S. economic data released during the week ending November 25
The U.S. economy was stagnating in October. The Chicago Fed National Activity Index (CFNAI) lost 22 basis points to a reading of -0.05. The CFNAI is an index based on 85 economic indicators and adjusted such that a reading of 0.00 means the U.S. economy is expanding at its historical average. Forty-five economic indicators positively contributed to the CFNAI, with the other 40 pulling down the index. Among the four major categories of indicators, three made negative (smallish) contributions: production (-0.05), employment (-0.02), and sales/orders/inventories (-0.01). Measures linked to personal consumption/housing made a modest +0.03 positive contribution. The CFNAI’s three-month moving average fell by ten basis points to +0.09.
Consumers continued having a case of the blahs in November. The University of Michigan’s Index of Consumer Sentiment lost 3.1 points to a seasonally adjusted reading of 56.8 (1966Q1=100). The same measure was at 67.4 in November 2021. The current conditions index plummeted by 6.8 points to 58.8 (November 2021: 73.6), while the expectations index slipped by 6/10ths of a point to 55.6 (November 22021: 63.5). The press release tied the mood drop to inflation, “rising borrowing costs, declining asset values, and weakening labor market expectations.” Consumers expect prices will rise 4.9 percent over the next 12 months.
Factory orders expanded in October. The Census Bureau reports that new orders for manufactured durable goods jumped 1.0 percent to a seasonally adjusted $277.4 billion. Durable goods shipments gained 0.4 percent to $274.4 billion (its 17th increase in 18 months). Transportation goods orders increased 2.1 percent, boosted by gains for civilian & defense aircraft and motor vehicles. Net of transportation goods, orders advanced 0.5 percent. Civilian capital goods orders net of aircraft (a proxy for business investment) grew 0.7 percent. Also growing were unfilled orders (up 0.6 percent to $1.144 trillion) and inventories (up 0.2 percent to $489.5 billion).
New home sales grew in October. The Census Bureau estimates sales of new single-family homes rose 7.5 percent to a seasonally adjusted annualized rate (SAAR) of 632,000 units. Even with the advance, new home sales remained 5.8 percent below year-ago levels. Sales improved in the Northeast and South but fell in Midwest and West. There was an 8.9-month supply of new homes on the market, the equivalent of 470,000 homes (+1.5 percent versus September 2022 and +21.4 percent versus October 2021). The median sales price of $493,000 was up 15.4 percent from October 2021.
Jobless claims inched up right before Thanksgiving. There were a seasonally adjusted 240,000 first-time claims made for unemployment insurance benefits during the week ending November 19. The Department of Labor puts the same figure at 244,000 a year earlier. The four-week moving average of 226,750 was 15.1 percent below year-ago levels. Continued claims totaled an unadjusted 1.256 million during the week ending November 5, down 45.0 percent from a year earlier.
Other U.S. economic data released over the past week:
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