Welcome to another edition of "The Economic Weekly." Whenever I receive/find good information about the US economy, I like to share it on my Blog as a value added service. After all, these are the statistics that determine whether or not your grocery bill will go up, driving to work will become more expensive, how much you will pay for your next home, etc.
Please see below for commentary and reports from last week's economic activity.
2011 continues the upward trajectory of stock prices. Economic conditions are showing modest improvements and signal that companies could see better demand as the year progresses. If business conditions improve early on this year, stock prices could continue their upward move and help consumers gain more confidence with their finances. Minutes from the November Fed Meeting were released on Tuesday and contained no surprises. The minutes stated that “the economic recovery proceeded at a modest rate in recent months, with only a gradual improvement in labor market conditions, and was accompanied by a continued low rate of inflation. Consumer spending, business investment in equipment and software, and exports posted further gains in the third quarter, and non-farm inventory investment stepped up. But construction activity in both the residential and nonresidential sectors remained depressed, and a significant portion of the rise in domestic demand was again met by imports.” This statement reiterates that the economy is growing at a very slow pace, but that inflation still remains low. This also implies that the Fed will most likely keep short-term rates low for an extended period of time. Market levels suggest that the first Fed mortgage rate hike will come in December 2011, but economists don’t expect the first hike to come until 2012. Good news for housing, but only time will tell.
|New Jobs Added||1/7/11||135,000||103,000||Private payrolls increased by less than what was expected, but positive adjustments to previous months help temper the disappointment. The 113,000 private jobs created continued an upward trend, but the pace of job creation is not picking up enough momentum.|
|Unemployment Rate||1/7/11||9.70%||9.40%||Unemployment continues to drop (albeit slowly).|