December Durable Goods Rose as Business Investment Contracted
Durable goods orders rose 2.4% in December after falling 3.1% the month before. However, new orders for capital goods fell by the most in 8 months in December, indicating a further contraction of business investment in Q4, dragging on GDP. A measure used to indicate business spending plans fell 0.9% last month.
Manufacturing PMI Dips in January, Services PMI Rises
The IHS Markit manufacturing index hit a 3-month low this month, falling from 52.4 to 51.7. Meanwhile, the services PMI rose from 52.8 to 53.2, the highest level since March 2019. Any figure above 50 indicates growth, while below 50 indicates contraction.
Gold Price Rises Even as Jobless Claims Point to Healthy Labor Market
US initial jobless claims came in below expectations last week, indicating ongoing strength in the labor market. Jobless claims rose to 211,000 for the week ended January 18, coming in at 4,000 fewer claims than forecast by economists. While hiring has slowed considerably over the last year, layoffs remain low with unemployment still at the 50-year low of 3.5%.
Existing Home Sales Hit 2-Year High in December, Supply Hits Record Low
The sales of pre-owned homes in the US rose in the last month of 2019 by 3.6% compared to the month before. Economists had forecasts monthly gains of just 1.3% for December, a rate of 5.43 million units. Meanwhile, sales rose 10.8% in the 12 months through December compared to the year before.
Consumer Sentiment Remains Strong in January, Gold Prices Rise
The University of Michigan released its consumer sentiment index for January on Friday, indicating ongoing upbeat sentiment. While the overall index slipped down a few points, the data supports the viewpoint that consumer spending, which accounts for two-thirds of US economic activity, will continue.
Industrial Production Ticks Downward In December, Gold Price Rises
Industrial production saw a 0.3% drop in December with losses in the utilities segment offsetting gains in factory production. The industry has been affected by the trade conflict between the US and China, along with unseasonably warm winter weather affecting utilities. The recent signing of a phase one agreement between the US and China may help stimulate growth in American industry.
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