It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week; I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
Industrial Activity Moves Slightly Higher in February
Industrial production bumped slightly higher in February, rising 0.1%, while January’s figure was revised lower to a 0.3% decline, down from the previously reported gain of 0.2%. Capacity utilization slipped to 78.9% in February. Economists were looking for industrial production of 0.2%, and capacity utilization of 79.5%. Due to the extreme cold weather that gripped much of the U.S. last month, utility output surged 7.3%, which supported industrial production’s rise in February. However, manufacturing, which accounts for the bulk of industrial production, slipped for the third-straight month. We’ll know more next month if the decline in manufacturing is due to the winter weather or if it’s a sign the U.S. economy is weakening.
Homebuilding Activity Plummets
In February, housing starts plunged 17% to a seasonally adjusted rate of 897,000 units, which marks the lowest level since January 2014. That’s well below economists’ forecast for a 1.05 million-unit pace. Building permits increased 3% to a 1.09 million rate. Extreme winter weather in the Northeast weighed on new home construction last month, as housing starts plummeted 56.5% in the Northeast during February. If the spring thaw comes sooner rather than later, we should see home construction pick back up in the coming months.
Jobless Claims Edge Up Slightly
For the week ending March 14, jobless claims increased by 1,000 to a 292,000 annual pace. That was right in line with economists’ projections. The four-week moving average increased to 304,750 last week. And claims for the previous week were revised slightly higher by 1,000 claims. Given an incredibly strong February for the jobs market, where the U.S. economy added 295,000 jobs and the unemployment rate slipped to 5.5%, this slight increase in jobless claims last week is nothing to be concerned about. The U.S. job market continues to show signs of improvement.
Economic Indicators Gain for Sixth Straight Month
The Conference Board’s leading economic indicator index increased 0.2% in February, which was right in line with economists’ expectations. Last month, the index was supported by gains in seven of the 10 indicators, and was slightly impacted by the winter weather, which weighed on jobless claims and the factory workweek. However, this marked the sixth-straight gain for the index, and that continues to bode well for the U.S. economy.
That’s all I have for you this week. I’ll be in touch with the latest Portfolio Grader changes on Monday.
Have a great weekend,