WASHINGTON (3/6/15)--Initial jobless claims jumped by 7,000 for the week ending Feb. 28 to 320,000, pushing claims to their highest level since May of last year, according to numbers released Thursday by the Employment and Training Administration (
The increase, the fourth in the past five weeks, nudged the four-week moving average up by 10,250 to 304,750, its highest since mid-January.
"For now, we are not reading too much into the recent rise because new filings are notoriously volatile around holidays including Presidents' Day," said Ryan Sweet, Moody's analyst (
), adding that while initial claims have been above 300,000 every week this year but three, sub-300,000 initial claims are rare.
Continuing claims continue to waver, climbing by 17,000 to 2.422 million for the week ending Feb. 21 after a decrease of 18,000 the prior week. Continuing claims track those who file for unemployment benefits for at least a second straight week.
The four-week moving average for continuing claims was largely unchanged. Further, the insured unemployment rate remained at 1.8%, which is down 0.4% year-over-year.
"All told, initial and continuing claims suggest the job market has taken a small step back in late February, but this is likely attributable to temporary factors, including the weather or strikes," Sweet said.
Massachusetts, Kentucky, Illinois, Pennsylvania and Ohio posted the highest increases in initial filings, while California and New York each experienced declines in new filings.
NEW YORK (3/5/15)--After its recent breakup with American Express, Costco this week announced new partnerships with Citigroup and Visa--deals that likely will greatly expand credit card use at the wholesale retailer, which traditionally has only accepted American Express, cash or debit cards (The Wall Street Journal March 2). After 16 years of exclusively accepting AmEx cards, starting in April 2016 customers will be able to use their Visa credit cards to make purchases. Visa will be the only credit card accepted at Costco. Costco also is partnering with Citi to offer a new co-branded card that will replace the AmEx-Costco card, according to The Journal. Any cards branded MasterCard or Discover Financial Services will not be accepted at the stores ...
WASHINGTON (3/5/15)--Smaller banks are outperforming their larger counterparts, with higher annual net income and loan growth posted in the final quarter of 2014, according to the most recent quarterly banking profile from the Federal Deposit Insurance Corp. (American Banker March 4). Net income for small banks climbed 28% on a year-over-year basis, while the industry overall experienced a 7.3% decline. Further, loan growth at small banks rose by 2.5% annually for the quarter, compared with 1.8% for all other banks. Finally, income at the four largest U.S. banks dropped by $4 billion on an annual basis, largely driven by higher litigation costs ...
WASHINGTON (3/5/15)--Economic activity continued to expand across most of the 12 districts tracked by the Federal Reserve in its Beige Book report, a summary of U.S. economic conditions, released Wednesday.
For the period between early January and mid-February, six districts reported that the local economy expanded at a moderate pace, Philadelphia and Cleveland reported modest improvements and Kansas City noted slight expansion.
The Fed found that consumer spending and home sales rose in most districts, but that residential construction reports were a mixed bag.
Residential sales climbed in Boston, Philadelphia, Richmond, St. Louis, Dallas and San Francisco, but fell in Cleveland and Kansas City. Much of the decline seen across the country, however, was attributed to poor weather conditions.
The report also found that financial services conditions mostly improved during the period, with overall loan demand climbing in all districts except Kansas City.
Residential lending improved in all districts, with a number of regions noting increased levels of refinancing activity.
"Reports across the districts indicated that credit quality has remained largely unchanged or has improved since the prior reporting period," the Fed added.
Further, oil prices and a strengthening dollar dragged on manufacturing, agriculture and energy exploration across many districts, the Fed said.
IRVINE, Calif. (3/4/15)--Home prices surged by 5.7% in January on a year-over-year basis, according to CoreLogic's Home Price Index report.
That marks the 35th consecutive month of annual home price appreciation (
"House-price appreciation has generally been stronger in the western half of the nation and weakest in the mid-Atlantic and northeast states," said Frank Northaft, CoreLogic chief economist. "In part, these trends reflect the strength of regional economies."
Colorado and Texas have experienced stronger job creation and with it, 8% to 9% home price appreciation over the past 12 months, Northaft said.
"In contrast, values were flat or down in Connecticut, Delaware and Maryland in our overall index, including distressed sales," he said.
Including distressed sales, 27 states and Washington, D.C., sit within 10% of their peak, according to the report. Further, New York, Wyoming, Texas and Colorado all reached record highs in the home price index in January.
Excluding distressed sales, home prices climbed 5.6% in January on a year-over-year basis and 1.4% on a monthly basis.
"A dearth in supply in many parts of the country is a big factor driving up prices," said Anand Nallathambi, CoreLogic president/CEO (
). "Many homeowners have taken advantage of low rates to refinance their homes, and until we see sustained increases in income levels and employment they could be hunkered down so supplies may remain tight."
WASHINGTON (3/3/15)--Consumer spending nationwide fell 0.2% in January after a 0.3% drop in December, according to numbers released Monday by the Bureau of Economic Analysis. The silver lining, perhaps, is that the saving rate climbed to 5.5%, doubling down on December's 0.5% rise (
While overall spending declined, real spending jumped 0.3% after a 0.1% step back in December thanks to upswings in service, utility and goods spending.
"Real spending growth accelerated in January as utility spending rebounded and consumers continued to benefit from low energy prices," said Scott Hoyt, Moody's analyst (
). "Discounting the weather effect, spending grew, though only modestly. Despite the weakness, however, the trend is positive."
Personal income growth remained steady with a 0.3% increase, while wage income growth accelerated to 0.5%.
Consumer prices fell 0.5%, which is the biggest drop since November 2008 and the fourth-largest decline on record, according to Moody's.
Energy prices fell 10.4%, and food prices dropped 0.2%. Excluding energy and food, core prices climbed 0.1%.
"Despite their recent increases, consumers are spending less on gasoline and other energy goods than they were a year earlier, freeing cash for other purposes," Hoyt said. "This is a drag on nominal spending growth, however."
WASHINGTON (3/2/15)--Pending-home sales recorded solid gains in January after December's step back, according to the National Association of Realtors (NAR).
On a seasonally adjusted annualized basis, the NAR pending-home sales index climbed 1.7% to 104.2 during the month, putting sales 8.4% ahead of last year's pace (Economy.com Feb. 27).
Pending-home sales are a leading indicator for the housing market, and precede changes in existing-home sales by one to two months, said Brent Campbell, Moody's analyst (Economy.com).
"Contract activity is convincingly up compared to a year ago despite comparable inventory levels," said Lawrence Yun, NAR chief economist. "The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth."
Gains were uneven by region, as pending sales climbed in the South and West by 3.2% and 2.2% respectively, while the snow-swept Northeast and Midwest recorded a 0.1% gain and a 0.7% retreat respectively.
On an annual basis, pending-home sales jumped 11.4% in the West, 9.7% in the South, 6.9% in the Northeast and 4.2% in the Midwest.
"All indications point to modest sales gains as we head into the spring buying season," Yun said. "However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices."
WASHINGTON (2/27/15)--Largely fueled by the price of oil, the consumer price index (CPI) dropped 0.7% in January, the largest monthly step back since November 2008 (
On an annual basis, CPI fell 0.1%, the first year-over-year decline since October 2009.
"The good news is that the majority of the weakness is concentrated in energy-related goods and services, as the core index rebounded modestly in January," said Andrew Davis, Moody's analyst (
). "This is comforting for policymakers, as concerns about disinflation bleeding into core prices were heightened after December's soft reading."
The energy index plunged by 9.7% in January, with gasoline prices--the main culprit--plummeting 18.7% from the prior month. Fuel also fell by 9.9%.
Food prices largely remained stable in January after a 0.2% rise in December. "Food at home" prices fell 0.2% with four of the six major grocery store food groups decreasing. "Food away from home" climbed 0.2% after a 0.3% increase the previous month.
Excluding food and energy, core prices climbed 0.2% in January, a slight increase in pace from December.
However, prices for new vehicles, used cars and trucks, and core commodities all fell, offsetting the gains in the core CPI.