Manufacturing slowed in December, while construction was stable in November. Here are the five things we learned from U.S. economic data released during the week ending January 3.
Manufacturing activity contracted again in December. The Manufacturing PMI from the Institute for Supply Management added 9/10ths of a point to 49.3. Despite the gain, the index has failed for the ninth straight month to surpass a reading of 50.0, indicative of a contracting manufacturing sector. On the plus side is that the Manufacturing PMI remained above 42.5 for a 56th straight month, signaling that the U.S. economy continued expanding as the year ended. Among Manufacturing PMI components, those for new orders, production, and inventories improved in December. Meanwhile, the employment index declined, extending its sub-50 streak for a seventh consecutive month. Seven manufacturing industries reported growing during the month, led by primary metals, electrical equipment/appliances, and wood products.
Construction spending held steady in November. The value of construction put into place held steady at a seasonally adjusted annualized rate (SAAR) of $2.153 trillion, matching that of October and 3.0 percent ahead of year-ago levels. Year-to-date construction spending has totaled $1.987 trillion. The Census Bureau notes that residential construction spending edged up 0.1 percent to an annualized $918.1 billion (+3.2 percent versus November 2023), while nonresidential expenditures slipped 0.1 percent to $1.234 trillion (+2.8 percent versus November 2023). The private (+0.1 percent) and public (-0.1 percent) sectors saw relatively minor deviations in construction spending during the month.
Homebuyers signed more contracts in November. The National Association of Realtors’ Pending Home Sales Index (PHSI) grew 2.2 percent to a seasonally adjusted 79.0 (2001=100). The PHSI, which measures housing contract activity for existing single-family homes, condos, and co-ops, was 6.9 percent ahead of year-ago levels. The index grew in the South (+5.2 percent), West (+0.5 percent), and Midwest (+0.4 percent) but fell in the Northeast (-1.3 percent). The press release notes that homebuyers “are no longer waiting for or expecting mortgage rates to fall substantially.”
Agricultural prices surged in November. The Department of Agriculture reports that prices received by farmers increased 6.8 percent during the month (not seasonally adjusted) and were up 5.4 percent from a year earlier. Crop prices rose 5.7 percent in November, while livestock prices jumped 2.5 percent. Pulling up the former were higher prices for lettuce, market eggs, grapes, and broccoli. Prices fell for milk, soybeans, and onions. Farmers reported their costs (commodities and services, interest, taxes, and farm wages) grew 0.5 percent in November and were up 0.4 percent from a year earlier.
Initial jobless claims remained relatively soft as 2024 wrapped up. First-time claims made for unemployment insurance benefits declined by 9,000 to a seasonally adjusted 211,000 during the week ending December 21. This represented a tiny 13,000 claim gain from the same week a year earlier for the Department of Labor measure. The four-week moving average of 223,250 initial jobless claims was up 8.5 percent from a year earlier. 1.975 million people (not seasonally adjusted) were receiving some form of unemployment insurance benefits during the week ending December 14, up 5.9 percent from the same week a year earlier.
Other U.S. economic data released over the past week:
- FHFA House Price Index (October 2024, Purchase-Only Index, seasonally adjusted): +0.4% vs. September 2024; +4.5% vs. October 2023.
- S&P Case-Shiller (October 2024, National Index, seasonally adjusted): +0.35% vs. September 2024; +3.60% vs. October 2023.
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What We Learned About the U.S. Economy Last Week 