The growth in retail and food services sales, continues to slow, after the slowdown in October, as , soften total sales.
The Commerce Department announced U.S. retail sales increased a slim 0.1 % in November on the seasonally adjusted basis. Building materials, food and gasoline stations sales led the retail sales increase in the last month.
Soft sales are generally unwelcomed news for investors, as retail sales account for about half of total consumer spending and about a third of final sales in the U.S. economy. Over the past 12 months, as the sales excluding motor vehicle and parts increased on the higher rate than total sales over the past 12 months, retail sales have climbed by 3.8 %.
Sales of essentials have increased by smaller rate than a month ago, sales jumped by 0.5 % on the seasonally adjusted basis, food services and drinking places sales rose the most, by 0.81 %. Over the past 12 months, sales of essentials grew by 4.1 %.
Sales excluding motor vehicle and parts increased sequentially, but decelerated by 0.2 % on the seasonally adjusted basis.
Some economists prefer core sales over the total retail and food services sales, because they believe it provides a better idea of longer-term retail sales trends.
Excluding the volatile auto sector sales grew by 4.4 % over the past 12 months.
October retail and food services sales were revised to $465.1 billion to show 0.7 % growth.
In November, sales increased 0.1% at internet retailers, health and personal care stores grew by 0.1%.
Several other areas with sales growth were 0.1% at electronics and appliance stores, building materials dealers grew by 0.3%.
Meanwhile, sales fell -0.2% at department stores.
Consumer Price Index
Prices increased on the faster pace again, led by increase in gasoline prices.
The Consumer price Indexes increased by 0.4 % in October on the seasonally adjusted basis, reported by the U.S. Labor Department. CPI advanced by 1.6 % for the year, as the core rate increased on the higher rate than total consumer prices.
High energy prices have raised the cost of raw materials and contributed to price increases in a range of goods.
Stripping out the volatile food and energy categories, the core rate of consumer price inflation rose less than a half of total cpi, by 0.1 % on the seasonally adjusted basis, consumer paid more for lodging, cars and clothes, Personal care products prices have sunk.
The core index is usually viewed by investors and the Federal Reserve as a better gauge of inflationary pressure because it excludes the volatile food and energy categories.
Over the past 12 months, stripping out the volatile food and energy categories, the core rate of consumer price inflation has climbed by 2.1 %.
Energy and commoditie prices grew by higher rate than in previous month, commodities by 0.6% and energy jumped by 3.5 % on the seasonally adjusted basis, energy rose by 0.1 % over the past 12 months.
Apparel prices have rebounded from decline in previous period, apparel prices grew by 0.3 % on the seasonally adjusted basis. Apparel prices rose by 0.7 % over the past 12 months.
Food & beverages prices have increased on the same pace like in previous month, food remained unchanged on the seasonally adjusted basis, meats, poultry, fish & eggs prices decrease the most, by -0.7 %. Over the past 12 months, food prices decreased by -0.4 %.
Prices for housing have increased on the same pace like in previous month, housing surged by 0.4 % on the seasonally adjusted basis, energy services rose the most, by 0.5 %. Prices for housing jumped by 2.9 % for the year.
Outlays for U.S. construction projects increased again after dipping in the last month, led by increase in residential construction.
Spending on construction projects increased in October on the seasonally adjusted basis by 2 %, reported by the Commerce Department. Growth of residential construction in the last month, shows that more Americans are able to afford to buy own home.
Rebound in construction spending is good news, as construction spending is closely watched by investors and economists for signs of whether the economy is growing or shrinking. Construction spending grew by 4.4 % over the past 12 months, as the public construction outlays increased on the slower rate than total construction spending.
Public construction outlays soared by 6.1 % more then double the rate, of total construction growth on the seasonally adjusted basis, led by increases of nonresidential construction in amusement, recreation projects and commercial buildings. Spending on health care projects fell.
Government spending is very volatile, sometimes the data includes stimulus spending.
Government construction outlays fell by -2.5 % from Oct. 2015.
Private construction outlays grew by 2.8 % on the seasonally adjusted basis.
Spending on private construction projects represents 39.76 % of total construction outlays.
From the same month a year ago, private construction outlays jumped by 9.8 %.
September outlays for U.S. construction projects were revised to $1150 billion to show -0.4 % decline.
In October total factory orders grew by 3.06 % to $469 billions, an increase of $13.9 billions from $455 in September on the seasonally adjusted basis. Over the past 12 months, , Bookings for U.S.-made products decreased by -0.81 %.
In September factory orders were revised to 0.31 % growth to $455 billions and manufacturing shipments to $463 billions an increase by 0.85 %.
Inventories remained unchanged in October on the seasonally adjusted basis, reported by the U.S. Commerce Department. Inventory to shipments ratio was unchanged at 1.39.
In addition, new orders excluding defense and transportation, which the government uses to help calculate gross domestic product, orders jumped and accelerated by 3.24 % on the seasonally adjusted basis and inventories by 3.24 % %.
Government spending is very volatile, sometimes the data includes stimulus spending.
Over the past 12 months, excluding defense and transportation bookings decreased by -0.61 % and inventories by -3.33 %.
Shipments increased in October by 0.37 % to $465 billions, an increase of $2 billions from $463 in September on the seasonally adjusted basis, reported by the U.S. Commerce Department. Shipments excluding transportation grew by 0.79 %.
Unfilled orders have rebounded from decline in previous period, unfilled orders increased by 0.87 % on the seasonally adjusted basis, led by 2.65 % growth in iron and steel mills, representing 1.67 % for total unfilled bookings. total factory inventories dropped by -5.33 % from Oct. 2015.
Factory shipments by industry
Factory new orders by industry
Durable Goods Orders
New orders for Durable Goods are on the rise again, after recent weakness, excluding defense booking grew even faster 5.86 %. That category excludes defense and gives a better indication of longer-term trends in the private sector.
In October Orders for U.S.-made products designed to last at least three years soared by 5.32 % to $239 billions, an increase of $12 billions from $227 in September on the seasonally adjusted basis, reported by the Commerce Department.
The rise in demand last month was lead by transportation and defense, but almost every sector tracked by the Commerce Department reported an increase.
The expansion in durable goods orders is an encouraging sign, particularly in light of the loss of momentum in the manufacturing sector evident in recent survey reports.
Bookings rose by 0.31 % over the past 12 months, but durable goods shipments fell by -2.12 %.
The normal wild swings in big-ticket purchases continue but the trend is still up and that is all that matters, some Wallstreet economists added.
Durable goods are typically bulky or heavy products designed to last at three years, such as trains, computers or furniture. The government’s durables report, however, is particularly volatile and subject to large swings month to month.
Unfilled orders have rebounded from decline in previous period, unfilled orders increased by 0.84 % on the seasonally adjusted basis, as unfilled orders for aircrafts and parts grew 1.69 % to $592 billions. total durable goods inventories dropped by -5.57 % from Oct. 2015.
Also, orders for a category known as core capital goods, viewed as the report's best indicator of private-sector trends, increased less than a half of the growth in total bookings, by 0.18 % on the seasonally adjusted basis and shipments by 0.30 %.
Such core capital goods orders are considered the best gauge of capital spending by businesses.
Core capital goods orders dropped by -9.39 % and unfilled orders by -9.50 % from Oct. 2015.
In September new orders were revised to -0.12 % decline to $227 billions and shipments to $234 billions an increase by 0.85 %.
In October total durable goods inventories declined by -0.08 % to $384 billions, a decrease by $0 billions from $384 in September on the seasonally adjusted basis, as inventories of computers and related products fell the most, down -1.17 % to $4 billions. Inventory to shipments ratio was unchanged at 1.64.
The Commerce Department announced total durable goods shipments edge up by 0.07 % to $235 billions, an increase of $0 billions from $234 in September in October on the seasonally adjusted basis, as shipments of computers and related products grew the most, up 7.67 % to $2 billions. Shipments excluding the volatile transportation sector, grew by 1.04 %.
In NovemberU.S. sales of new cars and trucks grew by 14.3 % to 1,539,841 units, higher than recent number of average monthly sales, from the same period last year.
But while the numbers were better than a year ago, as shoppers trickled back into the marketplace, analysts had been expecting more from all three.
Compare to month before, auto sales rose by 9.8 %, as consumers are showing consistent enthusiasm for returning to the automotive market, despite falling temperatures.
Ford Motor Co. sales of cars and trucks in the U.S. grew in November by 5.2 %. Ford said it sold 197,574 new vehicles in November in the U.S., up from 187,794 a year ago and 4.6 % above October total of 1,347,060.
Sales momentum built as November unfolded, with higher fuel prices driving consumer demand for more fuel-efficient vehicles in the second half of the month.
General Motors Co. reported a 10.2 % gain in November U.S. car sales from a year ago, to 252,644 vehicles. Despite the impressive headline number, month of November has revealed, that worlds biggest car manufacturer is losing market share, on its own domestic market. GM's U.S. marketshare fell to 16.41 % from 17.02 % a year ago.
The Buick brand notched the biggest gains up 16.1 % from a year earlier, to 18,530 units. Other three GM brands reported growth as well, GMC vehicles up 14.1 %, Chevrolet 8.1 %, while Cadillac sales went up 14.5 % to 15,326 vehicles.
Since the last time fuel prices spiked, both the economy and GM's product portfolio are undeniably stronger. GM is now strong across the board in cars, crossovers and trucks.
Recently Repoted Results
The U.S. Economy saw higher demand for its products and services as the exports rose to 189.2 billion, narrowing the Trade deficit in September, after widening in August, as the consumption of foreign produced goods declined.
In September the U.S. Commerce Department announced that, nations trade gap dropped by -9.9 %. Growing exports, the narrowing trade deficit, will eventually contribute to the GDP growth, the shrinking price of oil, cuts the trade deficit, adds to the gdp and disposable income growth, but economists believe that declining demand for oil imports might be a evidence of slowing economy.
Economists add that a decline in petroleum imports was the biggest driver behind the decline in September.
The U.S. trade deficit with China edged down to $-32.5 billion in September from the deficit of $-33.9 billion recorded in August, led by declining imports from China.
Chinese officials believe that a higher value of the yuan would not solve the U.S. trade deficit.
In September imports decreased by -1.31 % to $225.6 billion, following decline in miscellaneous other goods by -4.69 % and Transfers Under U.S. Military Sales Contracts. U.S. Imports of Advanced Materials also declined, by -19.09 % to $0.20 billions. Opposite to overall trend, imports of Cars, parts, engines and Passenger Fares, surged. Imports of Weapons increased also, up 12.90 % to $0.07 billions.
The decline came down to oil, as petroleum imports shrank, as oil prices fell to $9.2 billion a barrel in September from $10.1 billion a barrel in August and as Americans used -9.34 % less imported energy products. The decline of imports was broad based, services fell -2.38 % and imports of goods declined by -1.06 %.
Imports from europe fell, where purchases of goods made in Spain fell the most, but trade with Norway grew by 39.73 %.
U.S. Demand for goods from Pacific Rim Countries fell, as imports from Other Pacific Rim declined the most, but imports of goods from Hong Kong grew.
Imports from Mexico and Canada where lower in September.
Declining petroleum consumption in the U.S., has resulted in lower imports from OPEC (Organization of the Petroleum Exporting Countries), such as Saudi Arabia and Venezuela.
August trade deficit was revised to $-40.5 billion to show 2.5 % growth, which could lead to revision of the government's GDP estimate.
U.S. trade gap dropped by -24.6 % from Aug. 2015, due to 2.22 % increase in exports.
Exports grew in September by 0.55 % to $189.2 billion, reported by the Commerce Department, led by 4.58 % increase in Consumer goods and Travel services, which accounted for 1.24 % of total exports. Exports of Nuclear Technology also went up, by 429.27 % to $0.22 billions. But exports of Foods, feeds, and beverages fell the most, down -12.05 % and Passenger Fares declined by -0.90 %. U.S. Exports of Biotechnology also declined, by -16.01 % to $1.28 billions.
American exporters have been helped by a foreign-exchange rate, a weaker dollar makes U.S. goods cheaper in other countries. U.S. Exports of services increased by 0.62 %, services accounted for 0.62 % of total exports, sales of U.S. made products, grew by 0.52 %.
Increasing exports to Chile where offset by the decline of sales to Brazil.
Exports to europe improved, where demand of U.S made goods in Other E.U. Countries grew the most, up 28.24 %, but exports to Finland fell by -28.66 %.
Products made in U.S. have seen declining demand form Pacific Rim Countries, as exports to Other Pacific Rim declined the most, but exports of goods to Hong Kong grew.
Exports of Goods by Selected Countries & Areas
Imports of crude oil and petroleum products
In September U.S. industrial production declined by -0.2 % on the seasonally adjusted basis. U.S. industrial production fell by -1.1 % from Sep. 2015, .
Manufacturing of durable goods rose, led by wood products output, by 0.1 % on the seasonally adjusted basis.
For the period of August U.S industrial production was revised to -0.5 % decline.
Mining output decreased by -1.3 % on the seasonally adjusted basis. Output of nations mines dropped by -10.9 % from Sep. 2015.
Nondurable goods manufacturing capacity utilization declined to 74.5 % from 74.6 %, production decreased -0.1 % at food, beverage and tobacco products, paper stores -0.7 %.
Production by industry
Capacity utilization by industry
The nonfarm payrolls grew 161,000 in October, as faster hiring puts more money in the hands of consumers, what usually leads to an increase in spending, as the nonfarm payrolls increase in public and private sectors.
In October economy added 161,000 jobs on the seasonally adjusted basis and the jobless rate fell to 4.9 %, from 5.0 %, reported by the Labor Department.
Nonfarm payrolls were strong accross the board in the October report, improvement in the private sector, was followed by the job growth in public sector, as the government hired 19,000 people.
As the year goes on, companies have been hiring at a faster clip as Americans increase spending and consumer confidence rises, economists have seen a steady improvement in the jobs market and recruiting activity.
Current report confirms positive trends in the nonfarm payrolls. The number of employed people decreased -0.03 % to 151,93 millions, the durable goods manufacturers have shed -5,000 jobs.
Average workweek remained unchanged in October on the seasonally adjusted basis, hours worked at the durable goods manufacturers grew at the highest pace to 41.10 hours, the biggest decline took place in transportation and warehousing sectors down to 38.60 hours, reported by the U.S. Labor Department.
With modest increase in hourly earnings and unchanged in hours worked, average weekly earnings increased in the private sector to $891.65 from $888.21 in the previous month.
The official unemployment rate does not tell the whole story since it does not count discouraged workers who recently stopped looking for a job. Unemployment decreased to 7.79 million, a decrease by -152,000 from 7.94 million in September by -1.91 % on the seasonally adjusted basis.
What's more, the drop in the unemployment rate in October stemmed mainly from a decline in the labor force as discouraged job seekers stopped looking for work, driving the employment participation rate down -0.10 % to 62.80 %.
The U.S. Labor Department announced hourly wages increased modestly by 0.39 % to $25.92, an increase of $0.10 from $25.82 in September in October on the seasonally adjusted basis.
On a year-over-year basis, earnings were up 2.86 %, This is above the 1.6 % year-over-year increase in the consumer price index in October.
Job growth by Industry
Salary by Industry
In September U.S. housing starts dropped by -9.0 % on the seasonally adjusted basis to annual rate of 1,047,000 units, a decrease of 103,000 units from 1,150,000 in August. Investors are not too upset by the drop. They noted that most of September´s decline took place in the Northeast and was due to drop in the volatile multifamily sector.
Good news came from the construction of single-family homes with 8.1 % increase, economists see a shift in the demand towards higher value homes.
New building retreated -36.0 % to annual rate of 282,000 units in the Northeast while the construction of multi-family units decreased -38.0 % accounting for 25.21 % of total construction. As demand for renting apartments declines.
Many economists consider single-family permits to be the most important number in the government's release.
In construction of housing units was bellow average rate of 856,536 housing starts.
Building permits continued to grow by higher rate, building permits soared by 6.3 % or 73,000 units to an annual rate of 1,047,000 units, from 1,150,000 in August on the seasonally adjusted basis Most of growth took place in the Northeast and it was concentrated in multi-dwelling buildings such as apartments.
New permits went up 23.6 % to annual rate of 146,000 units in the Northeast while permits for multi-family units grew 16.8 % accounting for 25.21 % of total permits issued.
Permits give an indication of whether demand for new homes is growing or slowing. Compare to a year ago monthly building permits jumped by 11.1 %
Housing starts dropped by -13.2 % from Sep. 2015, where housing starts in the Northeast declined the most.
New housing units authorized by region
New housing units started by region
Personal Income and Spending
Americans cut back on spending in September and increased their savings, another sign that the U.S. economy has cooled off, government data showed.
Personal income inched up 0.3 % in September at the annualized rate of $16.09 trillion on the seasonally adjusted basis, reported by the Commerce Department.
Yet spending has barely changed over the past month, indicating consumers have grown more cautious and they are trying to rebuild their savings. Businesses, for their part, have less reason to hire and boost production if consumer demand slackens. And without more hiring, consumer spending is likely to remain subdued.
Meanwhile, disposable income advanced by 0.3 %, as well, lifting average American income to $43,443 at the annualized rate.
The growth in Wages has accelerated, led by highest increase in Services-producing industries by 0.36 %, salaries in Government Sector grew as well, followed on the same pace by supplements to wages and salaries, as employers have paid more for government social insurance.
Personal consumption expenditures remained unchanged. The combination of higher income and lower spending allowed consumers to boost their savings rate to 5.7 % from 5.8 % in August, but interest income rose, in contrast to the declining savings rate.
A slower pace of consumer spending is one reason that economists are cutting estimates for gross domestic product growth.
Personal income and it's spending
Quarterly personal income
Americans have earned more in third-quarter and productivity grew as well, as productivity of nonfarm business, manufacturing of durable goods as well as total manufacturing played also a role in the advance.
In the third-quarter U.S. productivity grew by 3.4 % on the seasonally adjusted basis. Recent increase in hourly income helps Americans to spend more. Consumer spending is by far the bigger source of U.S. growth. Adding to the positive news rising productivity could result in higher profitability for businesses, despite the wage increases.
Output continues to grow by higher rate, production jumped by 3.5 % on the seasonally adjusted basis.
Over the past 12 months, mainly because increase in the labor costs, productivity in U.S. businesses decreased by -0.1 %. U.S. business production advanced by 1.7 % for the year.
U.S. real hourly compensation has rebounded from the decline in previous period, helping to improve consumer spending the largest contributor to the nation's economic growth, the hourly wages rose by 1.9 % on the seasonally adjusted basis.
The measure includes accrued inflation-adjusted wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. U.S. hourly inflation-adjusted compensation rose by 1 % over the past 12 months.
U.S. labor costs have increased by smaller rate than a quarter ago, the business labor costs increased by 0.2 % on the seasonally adjusted basis, led by increases in nonfarm business, durable goods manufacturing and in total manufacturing.
The measures of unit labor costs describe the relationship between compensation per hour and productivity U.S. labor costs grew by 2.2 % over the past 12 months.
II Quarter productivity was revised to -0.7 % decline.
Output, labor costs by category
Real hourly compensation by category
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Gross Domestic Product
Nation's output accelerated in the July-through-September period, as private domestic investments and foreign demand for American products pick up.
In the third-quarter U.S. economy grew by 2.9 % to $18,450 billions, an increase from $18,282 billions in the second-quarter on the seasonally adjusted basis. Exports and investments grew above averge in the third-quarter.
Constantly improving pace of economic growth is expected to be matched by improving labor market.
The revised GDP data showed strong gains registered by consumers in spending and income, which were revised higher than in the previous quarter. Salaries and Worker wages grew by 1.1 % quarterly.
Gross National Product increased by 1.5 % from a year ago, as consumer spending, investments and exports play major role in the advance.
The second estimate of GDP incorporates more data from the private sector and provides a more accurate measure of growth than the initial report. The revision is also the first to include data on business earnings.
A 2.50 % increase in federal outlays was offset by a -0.70 % decline in local and state spending. Spending by government at all levels jumped by 0.50 % annual pace.
In the third-quarter real consumer spending was estimated to have increased at a 2.1 % annualized clip, reported by the Commerce Department.
With estimated annual rate of $12,806 billions, seasonally adjusted in the second-quarter, consumer spending accounts for 69.41 % of economic activity.
Spending on U.S. made Goods increased by 2.2 %, where consumption of Durable Goods grew by 9.5 %, led by growing demand for new cars.
Nondurable goods were a weak point, with the decline of -1.4 %, as the gasoline and other energy goods mark the weakest spot with the decrease of -1.25 %.
One of most important sectors in U.S., the sevice sector grew by 2.1 %, led by growing demand for electricity and gas. Consumer spending for services accounts for 68.6% of total speding and 47.19% of total Gross national product.
Final sales, which exclude inventory behavior, were down to a 2.3 % gain in the third-quarter, following a 2.6 % gain in the second-quarter.
Investments grew by 3.10 % to $3,020 billions on the seasonally adjusted basis.
Stronger inventory buildup from July-through-September, added 0.61 percentage point to growth.
Economists expect companies to cut back on inventories in the October-through-December quarter. As a result, GDP growth is expected to slow.
Exports also turned in another solid performance, rising 10.00 % compared to 1.80 % in the third-quarter. Domestic manufacturers have led the U.S. growth in large part by boosting exports.
U.S. growth would have been even faster if imports, which subtract from GDP, hadn't increased sharply: Imports rose 2.30 % from 0.20 % in the third-quarter.
Producer Price Index
U.S. Producer prices increased again after stagnation in the last month, mainly because of higher food prices.
The Wholesale price Index increased by 0.3 % in August on the seasonally adjusted basis, reported by the U.S. Labor Department. Increase in food prices in the last month, was enormous challenge for consumers. PPI remained unchanged for the year, as consumer spending, investments and exports play major role in the advance.
Prices for finished consumer goods have rebounded from decline in previous period, finished consumer goods prices increased by 0.7 % on the seasonally adjusted basis. From Aug. 2015, prices for finished goods deteriorated by -2.1 %.
Stripping out the volatile food and energy categories, the core rate of producer price index rose less than a half of total PPI, by 0.1 % on the seasonally adjusted basis, materials for manufacturing, core intermediate materials and durable goods prices grew above average. .
The core index is usually viewed by investors and the Federal Reserve as a better gauge of inflationary pressure because it excludes the volatile food and energy categories.
Closely monitored PPI excluding food and energy increased by 1.1 % from Aug. 2015.
Crude materials prices have rebounded from decline in previous period, the cost of raw materials rose by 1.3 % on the seasonally adjusted basis, led by price increases for manufacturing materials and crude fuel. Core rate, viewed as a leading indicator of inflation decreased by -1.4 % on the seasonally adjusted basis. Prices for crude materials dropped by -8.4 % from Aug. 2015.
Prices for intermediate goods have rebounded from decline in previous period, intermediate prices jumped by 0.5 % on the seasonally adjusted basis, as prices for processed fuels increased the most. Core intermediate rate grew by 0.3 % on the seasonally adjusted basis. The core component of PPI is viewed as a key leading indicator of inflation. Prices for intermediate goods faded by -3.1 % for the year.
Intermediate products are items such as steel, processed from iron ore, before it is made into cars.
Investors are monitoring how corporations are passing along rising commodity prices onto consumers, which may signal the rise of inflation.
In July U.S. retail inventories fell by -0.4 % on the seasonally adjusted basis.-0.23 Over the last 12 months, inventories grew by 4.3 %, led by inventory build up of 8 %, at the car dealars.
Excluding volatile motor vehicle and parts inventories decreased by -0.41 %, with inventory to sales ratio of 1.27 on the seasonally adjusted basis, to $392.2 billions, from $393.9 billion in June.