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:
Consumer Credit Rises Slightly
In January, consumer borrowing rose by $10.5 billion. This came below economists’ estimates of a $16.5 billion increase, and represented a deceleration from December’s $21.4 billion increase. Revolving debt, which includes credit cards, actually fell $1.1 billion. Meanwhile, non-revolving debt, which includes student and auto loans, jumped $11.6 billion. In dollar terms, consumer credit rose at the slowest rate since November 2013. And the last time that revolving debt fell was 11 months ago. However, given the significant increase we saw in December, it’s understandable that borrowing activity slowed down somewhat in January.
Wholesale Inventories Increase
In January, wholesale inventories increased 0.3%. This surprised economists, as the consensus called for a 0.2% decline. December’s inventories were also revised to reflect no change, compared with the previously reported 0.1% decrease. At the same time, sales at wholesalers fell 1.3%, following a 0.6% dip in December. At the current sales pace, wholesalers have enough in inventory to last 1.35 months. With sales on the decline, wholesalers are having a tougher time clearing their shelves. As a result, economists expect the inventory accumulation to weigh on 2016 GDP.
Initial Claims for Unemployment Fall
For the week ending March 5, initial claims for unemployment fell by 18,000 to a seasonally adjusted 259,000. This was a steeper drop than expected, as economists were looking for claims to tick down to 275,000. Meanwhile, the four-week moving average declined 2,500 to 267,500. Jobless claims are now near a five-month low. However, last week’s Unemployment Rate report indicated that the jobs market still has plenty of room for improvement. I’d like to see improvements in hourly wages and the length of the average workweek.
Have a great weekend,