Economic News in Review Greenville SC
Here is last week’s economic news in review Greenville SC.
Last week’s economic headlines saw gains in retail sales, along with consumer and producer price increases, a return to more measured performance in short-term employment activity, and new home construction ended the year on a positive note.
Retail Sales
Retail sales enjoyed a bump in December thanks to holiday shopping and sales of winter clothing and related goods, according to sales numbers released last week by the Census Bureau.
Looking at December’s performance, retail and food services sales grew by 0.2 percent over November to hit $431.9 billion, the Bureau reported. This marked a 4.1 percent gain over December 2012, and total sales for the 12 months of 2013 were up 4.2 percent from 2012. These performance gains are important, because consumer spending powers 70 percent of the U.S. economy.
“It’s encouraging as we exit the year, particularly with some of the headwinds that we had with a little bit more challenging weather and the shorter holiday-spending period,” Ameriprise Financial Inc. senior economist Russell Price told the Bloomberg new services, adding that “the consumer is still a driver [of the economy].”
Key performers were clothing stores, which increased their sales by 1.8 percent; food and beverage stores, which were up 2 percent; gas stations, which grew by 1.6 percent; and non-store retailers, which experienced a 1.4 percent gain. That last item is important to note, because non-store retailers include online retailers, which analysts say are gaining more of the holiday shopping market.
Bearing that in mind, brick-and-mortar retailers saw a dint in their December sales. Sporting goods, hobby, music and bookstore sales were down 0.6 percent; and electronics and appliance sales dropped by 2.5 percent.
Pricing
In related news, consumer prices also saw gains in December. The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent for the month, the Bureau of Labor Statistics reported last week. Looking at the year, the all items index increased 1.5 percent over the last 12 months.
Energy and shelter costs were the primary influences and December’s price gains, with a gasoline index increase of 3.1 percent, along with heating fuel and electricity price gains pushing the overall energy index up 2.1 percent.
Meanwhile, the Bureau’s Producer Price Index for finished goods grew by 0.4 percent in December. Looking at the year, prices for finished goods increased 1.2 percent in 2013 compared with 2012’s 1.4 percent gain. This marked the smallest annual PPI increase in five years, and could mark the moment the Federal Reserve begins to change the course of their inflation policies.
The lack of inflation pressures will give the Fed more room to maneuver,” said Gennadiy Goldberg, a U.S. strategist for TD Securities USA.
Employment
It appears that short-term employment figures could be shaking off some of the holiday season volatility, according to last week’s data from the Employment and Training Administration.
The number of first-time claims filed for unemployment benefits by the newly unemployed during the week ending Jan. 11 dropped to 326,000, a decline of 2,000 claims from the preceding week's downwardly revised figure of 328,000, the Administration reported. This was in line with analyst expectations.
The four-week moving average, a more stable figure, was 335,000, a drop of 13,500 from the prior week's revised average of 348,500; further evidence the mid-November-through-December roller coaster might be smoothing out.
Real Estate
Lastly, looking at new real estate, December construction performance was rocky, but ended the year on an undeniably positive swing.
Construction permits issued in December for private housing were at an annual rate of 986,000, which was 3 percent down from November, but 4.6 percent higher than the December 2012 estimate of 943,000, the Census Bureau reported. Looking at standalone housing, Permits issued for building single-family homes issued in December were at a rate of 610,000, which was 4.8 percent below November.
Starts on construction of private housing in December dropped to an annual rate of 999,000, which was 9.8 percent below November, but was 1.6 percent over the December 2012 rate of 983,000. Starts on single-family homes in December hit a rate of 667,000, which was 7 percent below November.
Completions of housing construction in December dropped to an annual rate of 744,000, which was 10.8 percent below November, but is 10.7 percent higher than the December 2012 rate of 672,000. Completed constructions of single-family homes in December declined to a rate of 550,000, which was 8.2 percent below November.
Comparing yearly totals, the Bureau estimates construction on 974,700 housing units was authorized by building permits in 2013, which was 17.5 percent over the 2012 figure of 829,700. Similarly, construction was completed on an estimated 762,200 housing units in 2013, which was 17.4 percent over the 2012 figure of 649,200.
This week we can expect a light slate of economic news:
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; December existing home sales from the National Association of Realtors; and leading economic indicators for December from The Conference Board.
Economic News in Review Greenville SC
Have a Big day,
Randy
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