January 30, 2015
U.S. economic growth stumbled in the final quarter of 2014, led by lower business investments and economic problems around the globe. The Bureau of Economic Analysis reported Gross Domestic Product (GDP), the broadest measure of goods and services produced in the U.S., rose by 2.6% in the fourth quarter of 2014, down from the 5% recorded in the third quarter. The 2.6% was below the 3.2% expected. For all of 2014, GDP grew by 2.2%. Within the report it showed that both inflation components declined.
Consumer Sentiment rose to its best levels since 2004 this month led by better job and wage prospects. The Index hit 98.1 for the final reading in January and the gauge has been steadily increasing since August. “Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years. The anticipated strength in the overall economy has been accompanied by more favorable income and employment expectations”, said Richard Curtin, the survey’s director.
American workers across the nation saw wages and benefits rise at a modest pace in 2014, a signal that an improving job sector could push employers to pay workers a bit more in the coming months. The Labor Department reported that the Employment Cost Index rose by 2.2% in 2014, slightly higher than the 2% in 2013 and also ahead of 1.3% inflation rate. However, just the wage gauge alone saw an increase of 1.7% last year, which was below the gain seen in 2013.
January 29, 2015
Americans filing for unemployment benefits in the latest week fell to a near 15-year low, signaling that the improving job market is still on track. The Labor Department reported that Weekly Initial Jobless Claims declined by 43,000 to 265,000, well below the 301,000 that was expected. The Department said there were no unusual circumstances surrounding the big drop, but the Martin Luther King Jr. holiday meant there were fewer days for government employees to crunch the numbers.
The National Association of REALTORS® reported that December Pending Home Sales unexpectedly fell by 3.7% from November, but remained above year-over-year levels for the fourth consecutive month. The 3.7% was below the 0.6% gain that was expected as fewer homes available for sales and a slight acceleration in prices likely led to the decline. The northeast saw the biggest drop falling 7.5%. A sale is listed as pending when the contract has been signed, but the transaction has not closed.
On the lighter side, with Super Bowl Sunday this weekend, Americans will host parties at their homes or head out to their favorite watering holes for the festivities. Here are some facts associated with the big day: Party goers are expected to consume 1.25 billion chicken wings, along with 14 billion burgers. It is expected that 7.5 million households will purchase a new television for the big day. Corporations are expected to spend about $359 million on ad time for the game, with each 30-second advertisement costing about $4.5 million. Lastly, it is expected that there will be 25.7 million Tweets sent during the game.
January 28, 2015
Apple reported quarterly earnings on Tuesday evening easily surpassing Wall Street estimates. The company reported that it sold 34,000 iPhones per hour, 24 hours a day in each and every day of the quarter! That’s a lot of hardware, which came to 74.5 million iPhones sold in the quarter. The iPhone maker reported that it made $18.04 billion in profits on $74.6 billion in revenues, both records for Apple. The next big rollout for Apple, the Apple Watch, will begin shipping out in April.
The investing world will be glued to their TV screens or portable news devices at 2:00 p.m. EST this afternoon when the Federal Reserve is scheduled to release it monetary policy statement. Most economists feel that there will be no change in the short term Fed Funds Rate, but the statement may reveal when interest rates may begin to rise. It is expected that the Fed Funds Rate will begin to rise sometime near June or the second half of 2015. However, there is a growing number of experts that feel that due to the current state of Europe, the somewhat radical new regime in Greece, the uncertainty surrounding the strong U.S. dollar and plunging oil prices–rates are not going higher anytime soon.
Prices at the pumps had fallen four consecutive months, but there was a slight uptick in prices to bring the national average price for a regular gallon of gasoline to $2.38 on Tuesday, up from $2.033 on Monday. And where prices are still very low, it was the first increase since September 25, reports motor club AAA. It was the longest streak of gas price declines on record. AAA went on to say that prices will gradually rise this spring due to seasonal demand and maintenance, but shouldn’t rise above $3 in 2015.
January 27, 2015
Americans across the country scooped up new homes in a month that typically sees a lull in sales. The Commerce Department reported that New Home Sales rose by 11.6% from November to an annual rate of 481,000, well above the 450,000 expected. Lower unemployment rates, historically low interest rates and slowing gains in home prices were the reasons behind December’s rise.
Home price gains continue to ease as they come back down to more normal levels after the big gains seen in 2013 and the beginning of 2014. The Case Shiller 20-city Home Price Index rose by 4.3% on a year-over-year basis in November, down from the 4.5% recorded in October and well below the double digit gains seen at the end of 2013. “With the spring home buying season, and spring training, still a month or two away, the housing recovery is barely on first base,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Prospects for a home run in 2015 aren’t good.”
Consumer Confidence surged in January to levels not seen in seven years as both economic and job growth gains have been improving. The Conference Board reported that Consumer Confidence rose to 102.9 this month, a level not seen since August 2007, well above the 96.0 expected, and up from the December reading of 93.1. The jobs “hard-to-get” index fell again, signaling that there is less pessimism among Americans seeking jobs.
January 26, 2015
Black Knight Financial Services reported on Monday that home prices edged up 0.1% and are up 4.5% year-over-year. The average home price index hit $241,000 in November, which is 10% lower than the $268,000 peak hit back in June of 2006. The states of Texas and Colorado continued to outperform with each hitting new peaks again. The worst performing region was Baltimore, which saw a 0.8% decline.
A major winter storm is expected in the Northeast from Monday evening until Wednesday morning, that could dump up to 3 feet of snow in some areas. The storm has already impacted airline travel with 4,360 flights being canceled and the weather could ground all flights at the three of New York City’s major airport on Tuesday. The storm could also affect travel across the U.S. on Monday and Tuesday.
The first Federal Open Market Committee (FOMC) meeting of 2015 will take place on Tuesday and will culminate on Wednesday with its monetary policy statement being released at 2:00 p.m. EST. The Fed members are not expected to raise the short term Fed Funds Rate, but the statement could reveal plans as to when that rate will begin to rise in 2015. The Federal Reserve has left interest rates low for an extended period in an effort to promote job and economic growth. The economy and job markets have improved greatly since the Great Recession ended in June of 2009.
January 23, 2015
The National Association of REALTORS® reported on Friday that December Existing Home Sales in December rose by 2.4% from November to an annual rate of 5.04 million units, which was below the 5.10 million expected. The report did have some negative news: sales in 2014 fell 3.1% from 2013 totaling 4.93 million units. Within the report it showed that there was a 4.4 month inventory supply, while the median price was $209,500 in December, up 6% from a year earlier.
In earnings news, fast food giant McDonald’s reported that fourth quarter sales fell 7% with profits declining by 21%. Revenues came in at $6.6 billion for the quarter, while profits fell to $1.1 billion from the same period a year ago. The world’s largest restaurant chain saw sales drop across all markets, most notably here in the U.S. as it loses customers to more upscale burger stops such as Five Guys and Chick-fil-A. McDonald’s operates 36,000 restaurants around the globe.
On the lighter side, with Super Bowl Sunday fast approaching, consumers looking to have chicken wings on their menu will have to shell out a few extra bucks, but the wings will be a little fatter. Due to the recent drop in corn and soybean, farmers will be fattening up their chickens with extra feed. The cost of wholesale wings have risen by 8.2% this month to $1.72 a pound, the biggest jump to start a year since 2012. The reason, the number of actual chickens slaughtered last year fell, which has caused a decline in the juicy wings by 50 million this year. Super Bowl Sunday is typically the biggest wing consumption day of the year.
January 22, 2015
The European Central Bank (ECB) announced a big Quantitative Easing, or QE, style of stimulus this morning at its monthly meeting. The ECB said that it would purchase up to 60 billion euros per month in Bonds in an effort to fight off deflation and to promote economic growth. ECB President Mario Draghi also said that the central bank would extend the program, if conditions warrant. The eurozone region has seen economic turmoil for the past five years and these actions could help pull it out of its problems.
Americans filing for first time unemployment benefits fell in the latest week, down from seven-month highs in the previous week. The Labor Department reported that Weekly Initial Jobless Claims declined by 10,000 in the latest week to 307,000, but above the 300,000 expected. The uptick in the previous week could be due to the gyrations in hires and fires left over from the seasonal holiday employment picture. Those who continue to collect unemployment benefits increased by 15,000 to 2.44 million in the week ended January 10.
Motor club AAA reports that U.S. motorists are paying the lowest average gas prices since April 2009, and the average price is likely to drift below $2 per gallon before the end of January. The national average price for a regular gallon of gas at the pump is $2.04. The price has now fallen 117 consecutive days, for a total of $1.29 per gallon during the decline. Today’s price is down $1.23 in less than a year. AAA predicts the average price to remain below $3 in 2015.
January 22, 2015
Enjoy the latest YOU Magazine – January 2015.
January 21, 2015
The housing markets received good news in December to end a mixed year for the sector. The Commerce Department reported that Housing Starts rose by 4.4% from November to an annual rate of 1.09 million units, which was the highest annual pace in seven years. The 1.09 million was above the 1.04 million expected. The rise was led by a surge in single-family starts…the strongest rise since early 2008. In December, there is historically a small volume of new construction of homes, but the big jump could signal that builders are looking for a robust spring buying season.
With home loan rates hovering near historic lows, mortgage application activity continued to rise in the latest week, after a big jump in the previous week. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 14% and has risen to its highest level since June 2013. The refinance index jumped 22%, while the purchase index fell 3%.
The European Central Bank (ECB) is set to enact a massive stimulus program to boost economic growth in the region along with fighting deflation. The ECB commission has vowed to spend 50 billion euros a month until December 2016. The program is set to begin on March 1 and will eventually expand the ECBs balance sheet to 3 trillion euros. In addition, the Bank of Canada cut its key interest rate by .25% today, citing the economic threat by falling oil prices.
January 20, 2015
Home builder sentiment across the nation slipped modestly in January, but still remains well above levels seen in early 2014. The National Association of Home Builders reported that its Housing Market Index slipped to 57 in January, which was just below the 58 expected. Readings above 50 indicate that builders view market conditions as favorable rather than poor as the index has not been below 50 since June 2014. “After seven months above the key 50 benchmark, builder sentiment is reflecting the gradual improvement that is occurring in many markets throughout the nation,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.
President Obama will deliver his State of the Union address on Tuesday night, which will most likely be a platform to declare victory over the economic fallout that made up his first six years in office. The address will begin at 9:00 p.m. EST. The president is also expected to center his address on the wealth inequality and will most likely lay out plans to enact additional taxes for wage earners making $500,000 or more, while easing some taxes for the middle and lower classes. The new proposals will target inherited taxes, capital gains and large financial institutions to pay for the tax benefits for the low and middle class taxpayers.
The International Monetary Fund (IMF) has issued good news for the U.S. as it has raised its economic forecast for 2015. The upward revisions are due in part to lower oil prices, which is fueling stronger consumer demand for goods and services. The IMF forecasts that the U.S. economy will grow by 3.6% in 2015, up from the 3.1% forecast issued back in October. However, the global economy is expected to grow by 3.5%, down from 3.8% originally projected.