In Portfolioticker today
Today at the stock market
“Major U.S. stock indexes fell on Thursday, with the S&P 500 down the most in a month, as investor worries over potential roadblocks to the Republicans’ tax overhaul more than offset optimism over strong retail sales data.
Though congressional Republicans had reached a deal on final tax legislation on Wednesday, Republican Senators Marco Rubio and Mike Lee said on Thursday they would not get behind the bill without changes to child tax credits. More: Reuters
As the fast-moving Republican tax revamp has evolved, it has tilted increasingly toward benefiting businesses and wealthy taxpayers, a trend that aides were saying privately is a growing concern for some lawmakers. Equity investors worry that stocks could tumble if the bill fails.
“The last catalyst left for this year is tax reform. Any market move is based on the shifting probabilities of its passage,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee, citing uncertainty over Rubio’s demands.
Stocks fell even as U.S. retail sales increased more than expected in November as the holiday shopping season got off to a brisk start, pointing to sustained strength in the economy.
“The fear they can’t get corporate tax cuts across the finish line might be causing the market to turn down, despite the strong retail sales and other good economic data,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Investors were also digesting the U.S. Federal Communications Commission’s vote on Thursday to repeal landmark 2015 rules aimed at ensuring a free and open internet, setting up a court fight over a move that could recast the digital landscape. More: Reuters
Walt Disney struck a deal to buy Twenty-First Century Fox’s assets for $52.4 billion in stock. More: Reuters
Healthcare stocks were the biggest weight on the S&P 500, falling 1.1%. Some portfolio managers said investors were cashing in on recent gains in the sector.” Reuters
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
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|S&P 500||SPX (INX)||2,652.01||-0.41%||2,238.83||+18.45%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
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^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) gave up earlier gains and closed little changed on Thursday. It’s down 0.5% this week.
The EUR fell 0.4% to USD 1.1775.
Britain’s GBP rose 0.1% to USD 1.341.
Japan’s JPY rose 0.1% to 112.38 per USD.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
Prices are as at 15:46 ET
- NYMEX West Texas Intermediate (WTI): $57.14/barrel +0.95% Chart
- ICE (London) Brent North Sea Crude: $63.41/barrel +1.55%% Chart
- NYMEX Natural gas futures: $2.69/MMBTU -1.07% Chart
AU: Labour Force. Nov/2017
Press Release Extract [au_labourforce]
Employment and hours
Monthly trend full-time employment increased for the 14th straight month in November 2017. Full-time employment grew by a further 15,000 persons in November, while part-time employment increased by 7,000 persons, underpinning a total increase in employment of 22,000 persons.
“Full-time employment has now increased by around 308,000 persons since November 2016, and makes up the majority of the 371,000 net increase in employment over the period,” the Chief Economist for the ABS, Bruce Hockman, said.
Over the past year, trend employment increased by 3.1 per cent, which is above the average year-on-year growth over the past 20 years (1.9 per cent).
The trend monthly hours worked increased by 3.8 million hours (0.2 per cent), with the annual figure also reflecting strong growth (3.4 per cent).
The labour force participation rate increased to 65.4 per cent, the highest it has been since October 2011. The female labour force participation also increased, to a further historical high of 60.1 per cent.
Unemployment and Underemployment
The monthly trend unemployment rate remained steady at 5.4 per cent in November 2017. The last time the trend unemployment rate was lower was in January 2013.
The quarterly trend underemployment rate decreased by 0.2 percentage points to 8.4 per cent over the quarter to November 2017.
“Over the course of 2017 the underemployment rate has fallen from an historical high of 8.7 per cent in February to 8.4 per cent in November, its lowest point in almost two years,“ Mr Hockman said.
The quarterly trend underutilisation rate, which includes both unemployment and underemployment, decreased by 0.3 percentage points to 13.8 per cent.
Seasonally adjusted data
The seasonally adjusted number of persons employed increased by 62,000 in November 2017. The seasonally adjusted unemployment rate remained steady at 5.4 per cent and the labour force participation rate increased to 65.5 per cent.
COMMENTARY: NATIONAL ESTIMATES
Australia’s trend estimate of employment increased by 22,200 persons in November 2017, with:
- the number of unemployed persons decreasing by 2,900 persons;
- the unemployment rate remaining steady at 5.4 per cent;
- the participation rate increasing by less than 0.1 percentage points to 65.4 per cent; and
- the employment to population ratio remaining steady at 61.8 per cent.
Over the past year, trend employment increased by 371,000 persons (or 3.1 per cent). Over the same 12 month period the trend employment to population ratio, which is a measure of how employed the population (aged 15 years and over) is, increased by 0.9 percentage points to remain at 61.8 per cent for the second month in a row, the highest rate since June 2012.
In monthly terms, trend employment increased by 22,200 persons between October and November 2017. This represents an increase of 0.18 per cent, which is above the monthly average growth rate over the past 20 years of 0.16 per cent.
Trend full-time employment increased by 15,300 persons in November, and part-time employment increased by 6,900 persons. Compared to a year ago, there are 308,200 more persons employed full-time and 62,700 more persons employed part time. The part-time share of employment decreased 0.5 percentage points over the past 12 months, from 32.0 per cent to 31.5 per cent.
The trend estimate of monthly hours worked in all jobs increased by 3.8 million hours (or 0.22 per cent) in November 2017, to 1,734.4 million hours. Monthly hours worked increased by 3.4 per cent over the past year, slightly above the increase in employed persons. As a result, the average hours worked per employed person has also increased slightly, to around 140.1 hours per month, or around 32.3 hours per week.
The trend unemployment rate remained at 5.4 per cent for the second consecutive month in November 2017, after the October figure was revised down to 5.4 per cent. The number of unemployed persons decreased by 2,900. The trend unemployment rate is now at its lowest point since December 2012.
The quarterly trend underemployment rate dropped 0.2 percentage points to 8.4 per cent over the quarter to November 2017. Over the past year this rate decreased by 0.3 percentage points, from a historical high of 8.7 per cent in February 2017, with the number of underemployed decreasing by 1,100 persons. The quarterly underutilisation rate, which is a combined measure of unemployment and underemployment in the labour force, was 13.8 per cent in November 2017, down from 14.1 per cent in August 2017.
The trend participation rate increased by less than 0.1 percentage points to 65.4 per cent in November 2017, the highest it has been since October 2011. The trend female participation rate was at a historical high of 60.1 per cent.
The labour force includes the total number of employed and unemployed persons. Over the past year, the labour force has increased by 351,000 persons (2.8 per cent). This rate of increase is above the rate of increase for the total Civilian Population aged 15 years and over (322,700 persons, or 1.6 per cent).
The trend participation rate for 15-64 year olds, which controls (in part) for the effects of an ageing population, increased by 0.1 percentage points to 77.8 per cent in November 2017. This is the highest rate recorded and indicates the 15-64 year old population is participating in the labour market at a record high level.
The trend participation rate for 15-24 year olds remained steady for a second consecutive month at 67.3 per cent in November 2017. The unemployment rate for this group decreased by 0.1 percentage points to 12.3 per cent in November 2017 and decreased by 0.7 percentage points over the year.
The trend series smooths the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market.
Seasonally Adjusted Estimates
Seasonally adjusted employment increased by 61,600 persons from October to November 2017 (following a combined increase of 28,600 over the preceding 2 months). The underlying composition of the net change was an increase of 41,900 persons in full-time employment and a 19,700 increase in part-time employment. Since November 2016, full-time employment has increased by 304,600 persons, while part-time employment has increased by 78,700 persons.
Seasonally adjusted monthly hours worked in all jobs increased by 9.8 million hours in November 2017 to 1,740.9 million hours.
The seasonally adjusted employment to population ratio increased 0.2 per cent to 61.9 per cent in November 2017, representing an increase of 0.9 percentage points from the same time last year.
The seasonally adjusted unemployment rate remained steady for the third consecutive month at 5.4 per cent in November 2017. The participation rate increased by 0.3 percentage points to 65.5 per cent.
The quarterly seasonally adjusted underemployment rate decreased by 0.2 percentage points to 8.3 per cent. The quarterly underutilisation rate decreased by 0.3 percentage points to 13.7 per cent.
COMMENTARY: STATE AND TERRITORY ESTIMATES
In November 2017, increases in trend employment were observed in all states and territories except for South Australia and Tasmania where employment decreased by 400 and 300 persons respectively. The largest increases were in New South Wales (up 8,300 persons) and Queensland (up 6,200 persons).
Similarly, over the past year, increases in employment were also observed in all states and territories except Northern Territory (down 2,900 persons). The largest increases were in Queensland (up 113,000 persons), New South Wales (up 111,000), Victoria (up 94,200 persons) and Western Australia (up 36,700 persons). The highest annual employment growth rates were in Queensland (4.8 per cent) followed by Australian Capital Territory (3.9 per cent), and Victoria (3.0 per cent).
Increases in the trend unemployment rate were seen in the Northern Territory and Western Australia (both up 0.2 percentage points). The largest decreases were recorded in the Australian Capital Territory (down 0.2 percentage points) followed by both New South Wales and Victoria (both down 0.1 percentage points).
The quarterly trend underemployment rate increased in Tasmania (up by less than 0.1 percentage points), remained the same in New South Wales at 7.9 per cent and decreased in all other states and territories. Western Australia and South Australia recorded the largest decreases (down 0.5 percentage points) followed by the Australian Capital Territory and the Northern Territory (both down by 0.2 percentage points).
The largest increase in the trend participation rate was in the Northern Territory (up 0.4 percentage points), followed by Western Australia and the Australian Capital Territory, which both recorded increases of 0.2 percentage points.
Seasonally Adjusted Estimates
In seasonally adjusted terms, the largest increase in employment was in Victoria (up 32,900 persons), followed by New South Wales (up 28,500 persons) and Western Australia (up 8,500 persons).
The largest increase in the seasonally adjusted unemployment rate was in Western Australia (up 0.6 percentage points) followed by South Australia (up 0.3 percentage points). Tasmania and Victoria recorded the largest decrease in the seasonally adjusted unemployment rate (both down 0.2 percentage points), followed by Queensland (down 0.1 percentage points).
The quarterly seasonally adjusted underemployment rate recorded the largest decreases in Tasmania (down 0.9 percentage points) followed by South Australia (down 0.8 percentage points). The New South Wales underemployment rate increased by 0.4 percentage points.
All states recorded increases in the seasonally adjusted participation rate. The largest increase was in Western Australia (up 0.8 percentage points) followed by New South Wales, Victoria and South Australia (all up 0.4 percentage points).”
Australian Bureau of Statistics, “6202.0 Labour Force, Australia, November 2017.“, 14 Dec 2017 More
EU: ECB Monetary Policy
Press Release Extract [eu_ecb_monetary]
“At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirms that from January 2018 it intends to continue to make net asset purchases under the asset purchase programme (APP), at a monthly pace of €30 billion, until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the APP in terms of size and/or duration. The Eurosystem will reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. This will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.“
European Central Bank, “Monetary policy decisions“, 14 Dec 2017 More
Press Conference Statement
“Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases.
Regarding non-standard monetary policy measures, we confirm that from January 2018 we intend to continue to make net asset purchases under the asset purchase programme (APP), at a monthly pace of €30 billion, until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase the APP in terms of size and/or duration. The Eurosystem will reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. This will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.
Our monetary policy decisions have preserved the very favourable financing conditions that are still needed for a sustained return of inflation rates towards levels that are below, but close to, 2%. The incoming information, including our new staff projections, indicates a strong pace of economic expansion and a significant improvement in the growth outlook. The strong cyclical momentum and the significant reduction of economic slack give grounds for greater confidence that inflation will converge towards our inflation aim. At the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend. An ample degree of monetary stimulus therefore remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term. This continued monetary support is provided by the additional net asset purchases that we decided on at our October monetary policy meeting, by the sizeable stock of acquired assets and the forthcoming reinvestments, and by our forward guidance on interest rates.
Let me now explain our assessment in greater detail, starting with the economic analysis. The economic expansion in the euro area continued in the third quarter of 2017, when real GDP increased by 0.6% quarter on quarter, after 0.7% in the second quarter. The latest data and survey results point to solid and broad-based growth momentum. Our monetary policy measures, which have facilitated the deleveraging process, continue to support domestic demand. Private consumption is underpinned by ongoing employment gains, which are also benefiting from past labour market reforms, and by rising household wealth. Business investment continues to strengthen on the back of very favourable financing conditions, rising corporate profitability and strengthening demand. Housing investment has also risen further over recent quarters. In addition, euro area exports are being supported by the broad-based global expansion.
This assessment is broadly reflected in the December 2017 Eurosystem staff macroeconomic projections for the euro area. These projections foresee annual real GDP increasing by 2.4% in 2017, 2.3% in 2018, 1.9% in 2019 and 1.7% in 2020. Compared with the September 2017 ECB staff macroeconomic projections, the outlook for real GDP growth has been revised up substantially.
Risks surrounding the euro area growth outlook remain broadly balanced. On the one hand, the strong cyclical momentum, underpinned by continued positive developments in sentiment indicators, could lead to further positive growth surprises in the near term. On the other hand, downside risks continue to relate primarily to global factors and developments in foreign exchange markets.
According to Eurostat’s flash estimate, euro area annual HICP inflation was 1.5% in November, up from 1.4% in October. At the same time, measures of underlying inflation have moderated somewhat recently, in part owing to special factors. Looking ahead, on the basis of current futures prices for oil, annual rates of headline inflation are likely to moderate in the coming months, mainly reflecting base effects in energy prices, before increasing again. Underlying inflation is expected to rise gradually over the medium term, supported by our monetary policy measures, the continuing economic expansion, the corresponding absorption of economic slack and rising wage growth.
This assessment is also broadly reflected in the December 2017 Eurosystem staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.5% in 2017, 1.4% in 2018, 1.5% in 2019 and 1.7% in 2020. Compared with the September 2017 ECB staff macroeconomic projections, the outlook for headline HICP inflation has been revised up, mainly reflecting higher oil and food prices.
Turning to the monetary analysis, broad money (M3) continues to expand at a robust pace, with an annual rate of growth of 5.0% in October 2017, from 5.2% in September, reflecting the impact of the ECB’s monetary policy measures and the low opportunity cost of holding the most liquid deposits. Accordingly, the narrow monetary aggregate M1 continued to be the main contributor to broad money growth, expanding at an annual rate of 9.4% in October, after 9.8% in September.
The recovery in the growth of loans to the private sector observed since the beginning of 2014 is proceeding. The annual growth rate of loans to non-financial corporations increased to 2.9% in October 2017, after 2.4% in September, while the annual growth rate of loans to households remained stable at 2.7%.
The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households, access to financing ‒ notably for small and medium-sized enterprises ‒ and credit flows across the euro area.
To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for an ample degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2%.
In order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively to strengthening the longer-term growth potential and reducing vulnerabilities. The implementation of structural reforms in all euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. Regarding fiscal policies, the increasingly solid and broad-based expansion strengthens the case for rebuilding fiscal buffers. This is particularly important in countries where government debt remains high. All countries would benefit from intensifying efforts towards achieving a more growth-friendly composition of public finances. A full, transparent and consistent implementation of the Stability and Growth Pact and of the macroeconomic imbalance procedure over time and across countries remains essential to increase the resilience of the euro area economy. Strengthening Economic and Monetary Union remains a priority. The Governing Council welcomes the ongoing discussions on completing the banking union and the capital markets union, and on further enhancing the institutional architecture of our Economic and Monetary Union.”
European Central Bank: Mario Draghi, President of the ECB, Vítor Constâncio, Vice-President of the ECB, “Introductory Statement to Press Conference“, 14 Dec 2017 More
EU: Flash PMI. Dec 2017
Press Release Extract [eu_pmi]
- Flash Eurozone PMI Composite Output Index at 58.0 (57.5 in November). 82-month high.
- Flash Eurozone Services PMI Activity Index at 56.5 (56.2 in November). 80-month high.
- Flash Eurozone Manufacturing PMI Output Index at 62.0 (61.0 in November). 212-month high.
- Flash Eurozone Manufacturing PMI(3) at 60.6 (60.1 in November). Record high.
The eurozone economy picked up further momentum at the end of 2017, with December seeing the fastest growth of business activity for
nearly seven years. The best factory output and order book gains since 2000 pushed the manufacturing headline PMI to a record high, while an upturn in service sector to growth to the highest since early-2011 underscored the broad-based nature of the current surge in activity. Job creation stayed at the highest for just over 17 years and price pressures remained elevated, albeit easing slightly during the month.
The headline IHS Markit Eurozone PMI rose to 58.0 in December, according to the ‘flash’ estimate (based on approximately 85% of final replies), up from 57.5 in November and its highest since February 2011.
The upturn continued to be led by manufacturing, where the headline PMI rose to its highest since the series began in June 1997. Faster manufacturing output growth (the best since April 2000) was accompanied by the largest monthly improvement in service sector activity since April 2011.
Activity rose in response to higher inflows of new orders, which showed the biggest monthly increase for just over a decade. In manufacturing, the largest upturn in new orders since April 2000 was buoyed by export orders rising at a rate only marginally below November’s record high. Growth of new business in the service sector was meanwhile the joint-highest in over a decade, highlighting the broad-based improvement in demand.
Future expectations also improved, perking up in both sectors and reviving after two months of decline.
Buoyant job creation was again seen as firms boosted capacity in line with strong demand and the improved outlook. Measured across both
sectors, employment growth was the joint-highest since September 2000, matching November’s recent peak. A record gain in factory payrolls helped offset a slowing in services job creation, albeit with the latter still the second-best in the past ten years.
Despite the recent bout of strong hiring, capacity constraints continued to be reported, reflected in a further marked rise in backlogs of uncompleted orders. Backlogs rose especially sharply in manufacturing, with December seeing a similar rise to the record increase seen in November.
Supply chains also likewise continued to be stretched as a result of strong demand, with average delivery times lengthening to an extent not seen since May 2000 as manufacturers reported a record increase in the amount of inputs purchased.
Strong demand was a key factor helping firms hike prices. Average charges for goods and services showed a slightly smaller rise than the prior two months but still recorded one of the largest increases since mid-2011.
Higher prices also reflected the need to pass higher costs on to customers. Average input costs rose sharply again in both sectors, though especially in manufacturing. The overall rate of inflation dipped from November, but remained among the highest seen over the past six-and-a-half years.
By country, growth in France outpaced that seen in Germany for the third month running, though both countries recorded strong gains. Although growth in France eased slightly, it continued the best spell of expansion seen since the first half of 2011. German business activity meanwhile grew at its fastest since April 2011, with the manufacturing PMI notable in hitting a record high. While both countries saw manufacturing lead services in terms of output growth, expansions remained broadbased.
Elsewhere, growth lagged behind France and Germany on average, though continued to run at one of the fastest rates seen since the global financial crisis.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
‘The eurozone economy is picking up further momentum as the year comes to a close, ending its best quarter since the start of 2011. The PMI is signalling an impressive 0.8% GDP increase in the fourth quarter, with accelerating growth seen in both Germany and France, where fourth quarter growth rates of 1.0% and 0.7-0.8% are indicated respectively.
‘France has been the big surprise this year, rapidly pulling out of its malaise to help shift the eurozone expansion into a higher gear.
‘The eurozone upturn is being led by a booming manufacturing sector, with a record PMI seen in December, but stronger domestic demand is also helping drive faster service sector growth.
‘Demand in the region’s home markets is being buoyed by the improved labour market, with new jobs being created at a pace not seen for 17 years over the past two months.
‘A revival in business confidence about the year ahead highlights how companies are shrugging off political uncertainty and instead focusing on the improving demand environment, setting the scene for a good start to 2018.
‘Although price pressures abated slightly in December, the robust growth of demand and tightening labour market hint at rising core inflationary pressures as we move through 2018.’“
IHS Markit, “Flash PMI. Dec 2017“, 14 Dec 2017 More
US: Unemployment Insurance Weekly Claims
Press Release Extract [ser_4]
“Seasonally Adjusted Data
In the week ending December 9, the advance figure for seasonally adjusted initial claims was 225,000, a decrease of 11,000 from the previous week’s unrevised level of 236,000. The 4-week moving average was 234,750, a decrease of 6,750 from the previous week’s unrevised average of 241,500.
Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending December 2, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 2 was 1,886,000, a decrease of 27,000 from the previous week’s revised level. The previous week’s level was revised up 5,000 from 1,908,000 to 1,913,000. The 4-week moving average was 1,918,500, an increase of 4,500 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 1,912,750 to 1,914,000.“
Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 14 Dec 2017 (08:30) More
US: Retail and Food Services. Nov 2017
Press Release Extract [us_retail]
“Advance estimates of U.S. retail and food services sales for November 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.7 billion, an increase of 0.8 percent (±0.5 percent) from the previous month, and 5.8 percent (±0.7 percent) above November 2016. Total sales for the September 2017 through November 2017 period were up 5.2 percent (±0.5 percent) from the same period a year ago. The September 2017 to October 2017 percent change was revised from up 0.2 percent (±0.5 percent) to up 0.5 percent (±0.2 percent).
Retail trade sales were up 0.8 percent (±0.5 percent) from October 2017, and were up 6.3 percent (±0.7 percent) from last year. Gasoline Stations were up 12.2 percent (±1.4 percent) from November 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 10.7 percent (±2.1 percent) from last year.”
US Census Bureau, “Advance Monthly Sales for Retail and Food Services“, 14 Dec 2017 (08:30) More
US: Import and Export Prices. Nov 2017
Press Release Extract [us_eximp]
“U.S. import prices rose 0.7 percent in November, the U.S. Bureau of Labor Statistics reported today, after ticking up 0.1 percent in October. Higher prices for fuel drove the increase in November and nonfuel prices recorded no change. U.S. export prices increased 0.5 percent in November following a 0.1-percent advance the previous month.
All Imports: Import prices advanced 0.7 percent in November following rises of 0.1 percent in October and 0.8 percent in September. Higher fuel prices were the main contributor to the overall advance in import prices for November. The import price index increased 3.1 percent over the past 12 months. U.S. import prices have not recorded an over-the-year decline since a 0.2-percent drop in October 2016.
Fuel Imports: The import price index for fuels rose 7.6 percent in November, after a 0.2-percent increase in October. Rising prices for import petroleum and natural gas contributed to the increase. Petroleum prices advanced 7.2 percent in November, the largest monthly rise since the index increased 7.5 percent in October 2016. Natural gas prices rose 26.3 percent, the first monthly advance since the index increased 8.0 percent in April and the largest rise since the index advanced 28.0 percent in July 2016. Import fuel prices rose 22.2 percent over the past year driven by a 24.1-percent increase in petroleum prices. In contrast, import prices for natural gas decreased 5.6 percent for the year ended in November.
All Imports Excluding Fuel: Nonfuel import prices recorded no change in November following a 0.1- percent rise in October. Lower prices for foods, feeds, and beverages offset higher prices for nonfuel industrial supplies and materials, consumer goods, and automotive vehicles. Import capital goods prices recorded no change in November. The price index for nonfuel imports advanced 1.4 percent between November 2016 and November 2017. The 12-month increase was driven by higher prices for nonfuel industrial supplies and materials, capital goods, and consumer goods which more than offset lower prices for automotive vehicles and foods, feeds, and beverages. The last over-the-year decline in nonfuel import prices was a 0.2-percent decrease for the 12-month period ended November 2016.
Imports by Locality of Origin: Prices for imports from China increased 0.3 percent in November, after recording no change in October. The price index for imports from China has not recorded an increase larger than 0.3 percent since advancing 0.4 percent in October 2011. Despite the rise, import prices from China edged down 0.1 percent over the past year. Import prices from Japan decreased 0.1 percent in November. Prices for imports from Japan fell 1.2 percent between November 2016 and November 2017, the largest 12- month drop since a 1.3-percent decline for the year ended April 2016. Prices for imports from Canada increased 2.2 percent in November, the largest monthly rise since the index increased 2.3 percent in June 2016. The price index for imports from the European Union ticked up 0.1 percent in November and import prices from Mexico edged down 0.1 percent.
Nonfuel Industrial Supplies and Materials: The import price index for nonfuel industrial supplies and materials advanced 0.9 percent in November, following a 0.8-percent increase in October. Higher prices for import chemicals and nonferrous metals drove the November advance. Nonfuel industrial supplies and materials import prices rose 8.8 percent over the past year, driven by higher prices for unfinished metals.
Finished Goods: Import finished goods prices were mixed in November. The price indexes for consumer goods and automotive vehicles each rose 0.1 percent. Import prices for capital goods recorded no change.
Foods, Feeds, and Beverages: The price index for import foods, feeds, and beverages declined 1.7 percent in November, after decreasing 0.4 percent in October. The drop was led by an 11.1-percent decrease in fruit prices and a 1.4-percent decline in fish and shellfish prices. Those decreases more than offset a 6.9-percent increase in vegetable prices.
Transportation Services: Import air passenger fares declined 2.3 percent in November, after an 8.8-percent increase in October. A 4.6-percent drop in Asian fares offset higher European and Latin America/Caribbean fares. Import air passenger fares declined 0.9 percent over the past 12 months. Import air freight prices increased 6.9 percent in November and rose 13.0 percent over the past year.
All Exports: The export price index rose 0.5 percent in November, after ticking up 0.1 percent in October and advancing 0.8 percent in September. In November, higher nonagricultural export prices offset lower prices for agricultural exports. U.S. export prices advanced 3.1 percent over the past 12 months and have not recorded an over-the-year decrease since the index fell 0.2 percent in November 2016.
Agricultural Exports: Agricultural export prices declined 0.6 percent in November following a 1.9-percent increase in October. Lower prices for vegetables and meats led the drop, more than offsetting higher prices for fruit. The agricultural export price index rose 2.1 percent for the year ended in November, driven by advancing prices for meat, wheat, and nuts.
All Exports Excluding Agriculture: The nonagricultural export price index increased 0.6 percent in November, after edging down 0.1 percent in October. Export nonagricultural industrial supplies and materials prices advanced in November, driving the monthly rise despite lower prices for capital goods and automotive vehicles. Export consumer goods prices recorded no change. Nonagricultural export prices increased 3.2 percent for the 12 months ended in November, continuing an upward trend since the index last fell on an over-the-year basis in November 2016. The price indexes for export nonagricultural industrial supplies and materials, capital goods, and automotive vehicles contributed to the 12-month advance.
Nonagricultural Industrial Supplies and Materials: Prices for nonagricultural industrial supplies and materials exports rose 2.1 percent in November. A 5.3-percent increase in fuel prices led the overall advance in November. Nonagricultural industrial supplies and materials prices increased 8.3 percent over the past year.
Finished Goods: Export prices for capital goods edged down 0.1 percent in November; the first decrease since the index fell 0.1 percent in October 2016. A 0.7-percent decline in telecommunications equipment prices led the November drop despite a 0.5-percent increase in computer peripherals, accessories and parts prices. Automotive vehicle prices fell 0.1 percent and prices for consumer goods recorded no change.
Transportation Services: Export air passenger fares rose 0.4 percent in November, led by increases in European, Latin America/Caribbean, and Asian fares. Despite the increase, export air passenger fares declined 1.7 percent for the year ended in November. The export air freight price index advanced 1.8 percent in November and increased 9.9 percent over the past year.“
Bureau of Labor Statistics, “Import and Export Prices. Nov 2017“, 14 Dec 2017 (08:30) More
US: Flash Composite PMI. Dec 2017
Press Release Extract [us_pmi]
- Flash U.S. Composite Output Index at 53.0 (54.5 in November). 9-month low.
- Flash U.S. Services Business Activity Index at 52.4 (54.5 in November). 15-month low.
- Flash U.S. Manufacturing PMI at 55.0 (53.9 in November). 11-month high.
- Flash U.S. Manufacturing Output Index at 55.7 (54.5 in November). 11-month high.
December data pointed to divergent trends across the U.S. private sector economy, with a slowdown in services growth more than offsetting a robust and accelerated upturn in manufacturing output. As a result, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index dropped to 53.0 in December, from 54.5 in November.
The latest reading signalled the weakest expansion of private sector business activity since March. Manufacturing production expanded at the fastest pace since January, while service sector output growth eased to a 15-month low.
A similar easing in new business growth was seen across the private sector economy in December. Resilient client demand and a modest rise in backlogs of work nevertheless encouraged firms to expand their operating capacity, as highlighted by another solid rise in payroll numbers at the end of 2017.
Input price inflation eased to a nine-month low during December, but the overall trend masked a steep and accelerated rise in manufacturers’ cost burdens. The latest increase in input prices across the manufacturing sector was the fastest for exactly five years.
Meanwhile, prices charged inflation eased in December, with both manufacturing companies and service providers recording slower rises in their average charges.
The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI.
IHS Markit U.S. Services PMI™
At 52.4 in December, down from 54.5 in November, the seasonally adjusted IHS Markit Flash U.S. Services PMI™ Business Activity Index
signalled the slowest upturn in service sector activity since September 2016.
Subdued business activity growth reflected a further loss of momentum for new order intakes. The latest increase in incoming new business was the least marked since April.
Job creation eased to a seven-month low in December, which survey respondents linked to softer new business growth and a moderation in confidence regarding the year ahead outlook. Latest data indicated that business optimism across the service sector eased for the second month running to its weakest since June 2016.
Input price inflation remained relatively subdued in December, with the latest rise in average cost burdens the slowest for nine months. Prices charged inflation also moderated since November.
IHS Markit U.S. Manufacturing PMI™
U.S. manufacturers experienced a robust and accelerated improvement in business conditions during December. At 55.0, up from 53.9 in November, the seasonally adjusted IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) signalled the strongest upturn in operating conditions since January.
December data pointed to sharper increases in production, new orders and employment. Anecdotal evidence suggested that greater domestic demand was a key driver of manufacturing growth at the end of the year. A number of firms also cited efforts to boost operating capacity at their plants, which led to the steepest rise in payroll numbers since September 2014.
Business optimism picked up for the third month running in December. The degree of positive sentiment was also the strongest since January 2016. Survey respondents widely commented on hopes of a sustained upturn in sales volumes over the year ahead, supported by new product launches and investment in additional plant capacity.
Meanwhile, higher prices for raw materials resulted in the strongest rate of input cost inflation since December 2012. There were signs that manufacturers had absorbed part of the rise in average cost burdens, as highlighted by a slower increase in factory gate charges in December.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
‘The flash PMI surveys brought a mixed bag of news. While manufacturing is ending 2017 with the wind it its sails, the service sector is struggling in the doldrums by comparison.
‘In manufacturing, faster output and order book growth encouraged firms to add factory workers at the fastest rate for over three years, painting a bright picture of the goods-producing sector expanding capacity in response to resurgent demand.
‘In contrast, service sector activity grew at its weakest rate for over a year, taking job creation to its lowest since May.
‘Similar divergences were seen in relation to future growth, with business expectations picking up in manufacturing to a near-two-year high but waning markedly in services to the lowest for one and a half years.
‘With services representing a far greater portion of the economy than manufacturing, the overall picture is therefore one of the manufacturing sector’s exuberance being overshadowed by the gloomier service sector.
‘Measured overall, the surveys point to the economy growing at a modest annualised rate of just over 2% in the fourth quarter.’“
IHS Markit, “Flash Composite PMI. Dec 2017“, 14 Dec 2017 (09:45) More
Nikkei Flash Japan Manufacturing PMI®. Dec 2017
Press Release Extract [jp_pmi]
- Flash Japan Manufacturing PMI® rises to 54.2 in December (53.6 in November).
- Solid output growth sustained amid a quickened expansion in new orders.
- Output price inflation accelerates to 41-month high.
Comment: Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said: “With Q3 GDP growth recently revised higher, latest flash PMI data signalled further positivity for the Japanese economy in the final month of 2017. “A 46-month high in the PMI was supported by the sharpest boost in order book volumes since January 2014. Recent yen weakness appeared to benefit exporters, with new orders from abroad rising strongly. “Furthermore, the inflationary trend in output charges was extended to a full year. Selling prices were increased by manufacturers at the fastest pace since July 2014.”“
IHS Markit, “Nikkei Flash Japan Manufacturing PMI®. Dec 2017“, 14 Dec 2017 More
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