According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on February 24, 2023, the number of new jobless claims decreased by 3,000 to 192,000 during the week ending 18 February. Continued claims were down 37,000 to 1.65 million for the February 11th week. The insured unemployment rate was 1.1%, a 0.1 percentage point down from the previous week's revised rate.
The BEA’s measure of consumer spending jumped 1.8% in January following two months of declines. It was the biggest gain in nearly two years and includes an uptick on spending on autos. The acceleration in spending reflects gains in both goods and services. Higher goods spending follows two months of decline. Consumer spending was up 7.9% Y/Y. Personal income, the aggregate spending power of the economy, continued to expand, up 0.6% with wages up 0.9% in January. Personal income was up 6.4% Y/Y. The personal savings rate (savings as a percent of after-taxes income) has been building the past 5 months and rose to a 4.7% annual rate of growth in January.
The personal consumption expenditures (PCE) price index rose 0.6% in January, the largest monthly gain since last June. Annual growth in the PCE price index, a measure of U.S. inflation the Federal Reserve watches closely, rose to 5.4% in January from 5.3%. Food and energy inflation continues to run hot with food prices up 11.1% Y/Y and energy goods and services up 9.6% Y/Y. Following several months of moderation the core PCE price index which strips out food and energy components, also rose, rising to a 4.7% pace of growth (from 4.6% in December). These most recent measures on U.S. inflation add pressure to the Fed to continue raising interest rates to bring inflation back down towards the 2% target.
Existing home sales fell 0.7% in January, which marks the 12th month of consecutive decline. Compared to a year ago, sales were off 36.9%. Existing home inventories grew at the end of January, but supply remained tight (2.9-months’). The median sales price was 1.3% higher than a year ago. Higher mortgage rates continue to negatively impact affordability for both first-time homebuyers and existing homeowners. Single-family home sales were down 0.8% in January, but existing condominium and co-op sales remained unchanged.
New home sales increased in January by 7.2%, compared to the same month last year although year-over-year sales remained lower by 19.4%. Higher sales in the south offset the declines in the northeast, mid-west and west regions. The number of new homes available for sale at the end of January was lower than the previous month. The inventory of new homes sat at 7.9%, lower than 8.7% in December and the 2022 peak (10.1%) in September.
In its second of three estimates, the BEA reported that Q4 U.S. GDP expanded at a 2.7% seasonally adjusted annual rate, lower than the 2.9% gain in last month’s “advance” estimate. The second estimate primarily reflected downward revisions to consumer spending and a wider trade deficit offsetting the upward revision in gross investment and private inventory. Compared to Q42021, U.S. GDP was up 0.9% Y/Y. The PCE price index increased by 4.3%, an upward revision of 0.4 percentage points.
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American Chemistry Council
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