Recent Economic & Committee News
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Weekly Economic Update: December 17-21, 2012
Dec 27 2012
GDP growth for the 3rd quarter was revised upwards to 3.1%. Existing home sales increased 5.9% in November as housing starts fell 3.0% and building permits rose 3.7%. Personal income rose 0.6% in November while personal spending increased 0.4%. Durable orders were up 0.7% in November. Initial jobless claims increased 17,000 to 361,000 for the week ended 12/15.
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Weekly Economic Update: December 10-14, 2012
Dec 17 2012
The Fed expanded its QE3 program and set levels of less than 6.5% unemployment or more than 2.5% inflation for ending its exceptionally accommodative policies. Industrial production increased 1.1% in November. The U.S. trade deficit widened 4.7% in October to $42.2 billion. The topline CPI fell 0.3% while the core CPI rose 0.1%. The topline PPI dropped 0.8% while the core PPI rose 0.1%. Business inventories rose 0.4% in October. The U.S. Treasury reported a $172.1 billion deficit in November. Initial jobless claims dropped 32,000 to 343,000 for the week ended 12/8.
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Federal Reserve Expands Quantitative Easing
Higher Inflation Risk for Little Growth Reward
Dec 12 2012
The Federal Reserve announced today that it will expand its newest bond?buying program, which began in September 2012 and is known as “QE3,” to provide ongoing support to the anemic economic recovery. The Fed will continue purchasing federal agency mortgagebacked securities at a rate of $40 billion per month and will begin purchasing $45 billion per month of longer?term U.S. Treasuries in order to compensate for the expiration of the maturity extension program “Operation Twist.” Although the length of the bond?buying program is indefinite, the Fed took the unprecedented step of linking its extraordinarily low target rate for federal funds to employment by saying “this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6?1/2 percent.”
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Weekly Economic Update: December 3-7, 2012
Dec 10 2012
The economy added 146,000 jobs in November as the unemployment rate declined to 7.7%. Consumer credit increased 0.5% to $2.753 trillion in September. Productivity increased 2.9% in the 3rd quarter of 2012. The ISM index declined 2.2 points to 49.5 in November as the ISM services index edged up 0.5 points to 54.7. Construction spending was up 1.4% in October. Factory orders increased 0.8% in October. Auto sales jumped up 8.7% in November. Initial jobless claims dropped 25,000 to 370,000 for the week ended 12/1.
• The economy added 146,000 nonfarm payroll jobs in November as the unemployment rate dropped to 7.7%, from 7.9% in October. According to the household survey (which determines the unemployment rate and is separate from the establishment survey which measures jobs), the labor force declined by 350,000 and the number of people employed declined by 122,000.
• Consumer credit increased by $14.2 billion, or 0.5%, to $2.753 trillion in October. Revolving credit (i.e., credit cards) increased 0.4% while non-revolving credit (i.e., auto loans) rose 0.6%.
• Productivity grew 2.9% in the 3rd quarter of 2012. This marks an upward revision from the previously reported 1.9% growth.
• The ISM index unexpectedly fell 2.2 points to 49.5 in November. The below-50 reading indicates contraction in the manufacturing sector for the fourth time in the past six months. November’s topline reading was the lowest since July 2009. The employment component of the index, at 48.4, was the lowest since September 2009.
• The ISM services index increased 0.5 points to 54.7 in November.
• Construction spending rose 1.4% in October.
• Factory orders rose 0.8% in October.
• Auto sales jumped up 8.7% in November to an annual pace of 15.54 million units. Sales were up 14.7% from a year ago.
• Initial jobless claims dropped 25,000 to a level of 370,000 for the week ended December 1st.
