(Continued)Regional manufacturing surveys suggested continued contraction in the sector in December, although the severity of the contraction was not so severe as in the previous month. The New York Fed's survey showed that the manufacturing index rose to -22.2 in January from -27.9 in the previous month, while the Philadelphia Fed survey's business conditions index rose to -24.3 from -36.1.
With the manufacturing sector in doldrums, expectations about industrial production were muted. The Federal Reserve said industrial output fell 2% in December and manufacturing production declined a steeper 2.3%.
Accentuating the weakness in the housing sector, a report released by Realty Trac showed that home foreclosures rose 17.1% month-over-month in December. In 2008, foreclosures rose by 81%.
The Reuters/University of Michigan's consumer sentiment index showed an increase in January to 61.90, although it is still at extremely low levels. The current conditions index declined to 69.2, while the expectations index rose for the second straight month to 57.2.
There is little to digest by way of economic news to digest in the upcoming holiday-shortened week. Traders may focus on the Commerce Department's housing starts report for December, the National Association of Homebuilders' housing market index for January and the regularly scheduled weekly jobless claims and oil inventory reports.
Housing starts are likely to show an increase in December, as they benefit from low mortgage rates, which in turn have pushed up refinancings and mortgage applications. However, the downtrend is likely to be still in place at least until the lower housing starts continue to feed into lower completions and eventually less inventory.
Monday
The markets are closed on Monday on account of a public holiday on Monday.
Tuesday
There are no important economic reports to be released on Tuesday.
Wednesday
The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET on Wednesday.
The oil inventory report for the week ended January 9th showed that crude oil stockpiles rose by 1.2 million barrels to 326.6 million barrels. Crude oil inventories continued to be the above the upper limit of the average range.
Gasoline inventories and distillate inventories increased by 2.1 million barrels and 6.4 million barrels, respectively. Refinery capacity utilization averaged 84.2% over the four weeks ended January 9th compared to 84% in the previous week.
The National Association of Homebuilders' is scheduled to release the results of their survey on homebuilders' confidence.
Builder confidence remained at a record low in December, with the housing market index holding at its November lows of 9, as buyers feared to move forward and builders found it impossible to compete with the cut-rate product that is continually flooding the market from mounting foreclosures.
Continued...
2009年1月18日星期日
Bottom of Economic Cycle Nowhere in Sight
(RTTNews) - The latest shock to have hit consumers is the rapid deterioration in the labor market, which saw a loss of 1.5 million jobs in the fourth quarter alone. Economists estimate nearly a million-job cut in the first quarter. Consumers, who were holding tight to their purse strings due to the turmoil in the real estate and the financial market, are now confronted with a debilitated labor market, which is facing the prospect of rapid job losses and falling income levels.
Belying hopes that heavy discounting would boost sales, real private consumption fell by 0.3%-0.4% month-over-month in December. Quite promptly, consumers have now become cautious, especially with respect to their outlays. Testifying to this fact, retail sales declined for the sixth straight month in December, with sales dropping 2.7% month-over-month.
A drop in gasoline sales was responsible for much of the weakness. That said, almost all major categories showed declines for the month. Core retail sales, excluding autos, building materials and gas fell 1.4%, marking the biggest decline since September 2001. To make matters worse, October and November sales were revised downwards.
Based on the weak consumer data, Danske Bank lowered its GDP forecast for 2008 to show a 1.1% decline. The firm also lowered its GDP forecast for 2009 to a 1.5% contraction compared to a 0.5% anticipated initially.
The Labor Department's import and export prices report revealed a smaller-than-expected decline in import prices for December. However, non-oil import prices fell a bigger-than-expected 1.1%.
Meanwhile, the Fed's Beige Book showed that all districts reported weaker activity. While holiday sales were reported to be weak, residential and commercial real estate activity was weak across almost all districts. The Beige Book also revealed that vehicle sales were either weak or down in all districts, while manufacturing activity remained weak in almost all districts. Credit conditions continued to remain tight and labor market conditions deteriorated, with most districts reporting pay freezes or reductions in overall compensation.
Business inventories at the end of November were down 0.7% month-over-month, according to a report released by the U.S. Commerce Department. Business sales declined 5.1% from the previous month and were down a steeper 8.9% from the year-ago period. The total business inventories to sales ratio at the end of November was 1.41 compared to 1.24 in the year-ago period.
Inflation data highlighted deflation risks. Producer prices fell 1.9% month-over-month in December, showing a decline for the fifth straight month. Suggesting further easing in pipeline inflation, intermediate goods and crude prices fell 4.2% and 5.3%, respectively. Excluding food and energy prices, the core producer price inflation rate was 0.2%. Meanwhile, the consumer price index rose 0.1% in 2008, the smallest increase since 1954. The core reading fell to a 1.8% rate for the year after peaking at 2.5% in September.
Continued...
Belying hopes that heavy discounting would boost sales, real private consumption fell by 0.3%-0.4% month-over-month in December. Quite promptly, consumers have now become cautious, especially with respect to their outlays. Testifying to this fact, retail sales declined for the sixth straight month in December, with sales dropping 2.7% month-over-month.
A drop in gasoline sales was responsible for much of the weakness. That said, almost all major categories showed declines for the month. Core retail sales, excluding autos, building materials and gas fell 1.4%, marking the biggest decline since September 2001. To make matters worse, October and November sales were revised downwards.
Based on the weak consumer data, Danske Bank lowered its GDP forecast for 2008 to show a 1.1% decline. The firm also lowered its GDP forecast for 2009 to a 1.5% contraction compared to a 0.5% anticipated initially.
The Labor Department's import and export prices report revealed a smaller-than-expected decline in import prices for December. However, non-oil import prices fell a bigger-than-expected 1.1%.
Meanwhile, the Fed's Beige Book showed that all districts reported weaker activity. While holiday sales were reported to be weak, residential and commercial real estate activity was weak across almost all districts. The Beige Book also revealed that vehicle sales were either weak or down in all districts, while manufacturing activity remained weak in almost all districts. Credit conditions continued to remain tight and labor market conditions deteriorated, with most districts reporting pay freezes or reductions in overall compensation.
Business inventories at the end of November were down 0.7% month-over-month, according to a report released by the U.S. Commerce Department. Business sales declined 5.1% from the previous month and were down a steeper 8.9% from the year-ago period. The total business inventories to sales ratio at the end of November was 1.41 compared to 1.24 in the year-ago period.
Inflation data highlighted deflation risks. Producer prices fell 1.9% month-over-month in December, showing a decline for the fifth straight month. Suggesting further easing in pipeline inflation, intermediate goods and crude prices fell 4.2% and 5.3%, respectively. Excluding food and energy prices, the core producer price inflation rate was 0.2%. Meanwhile, the consumer price index rose 0.1% in 2008, the smallest increase since 1954. The core reading fell to a 1.8% rate for the year after peaking at 2.5% in September.
Continued...
Palestinian militant groups announce one-week truce
(RTTNews) - Reports quoting Palestinian militant factions in the Gaza Strip, including Hamas, said Sunday they agreed to a conditional ceasefire with Israel, giving its forces one week to withdraw from the coastal war-stricken territory.
The crucial decision by the Gaza militant groups follows a unilateral ceasefire by Israel earlier in the day.
The unilateral truce was in danger, as Israeli Prime Minister Ehud Olmert indicated that it could be repealed and that Israeli forces would respond without further warning with no recess in Hamas rockets targeting southern Israe (continued...)
The crucial decision by the Gaza militant groups follows a unilateral ceasefire by Israel earlier in the day.
The unilateral truce was in danger, as Israeli Prime Minister Ehud Olmert indicated that it could be repealed and that Israeli forces would respond without further warning with no recess in Hamas rockets targeting southern Israe (continued...)
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