Wed 17 Jan 2018


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  • Today at the stock market

    bull/bearU.S. stocks jumped on Wednesday and the Dow closed above 26,000 for the first time as investors’ expectations for higher earnings lifted stocks across sectors.

    djia_26000_20180117

    The Dow also hit an all-time high in intraday trading. It had briefly reached the 26,000 milestone on Tuesday, in its fastest 1,000-point rise to date, before dropping back below that threshold. The S&P 500 posted a record closing high. It has gained 4.8% this year, posting only two sessions of losses:

    • The S&P 500 index rose 26.14 points, or 0.94%, to 2,802.56.
    • The Dow Jones Industrial Average rose 322.79 points, or 1.25%, to 26,115.65
    • The Nasdaq Composite index rose 74.59 points, or 1.03%, to 7,298.28.
    • Advancing issues outnumbered declining ones on the NYSE by a 1.85-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored advancers.
    • The S&P 500 posted 86 new 52-week highs and six new lows; the Nasdaq Composite recorded 107 new highs and 31 new lows.
    • Volume on U.S. exchanges was 7.40 billion shares, compared to the 6.31 billion average over the last 20 trading days.

    More than three-quarters of the 36 S&P 500 companies that have reported so far have topped earnings estimates, according to Thomson Reuters I/B/E/S. Outlooks for future earnings are rosy as well, due to the lower corporate tax rates passed in Dec 2017.

    “With any significant policy action, there’s an initial pop in the market, but then it sits and digests it,” said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts.

    “Now we’re starting to get earnings guidance … At that point, the market starts to incorporate it as ‘Yes, this is actually happening’ as opposed to ‘Well, this might happen’.”

    Boeing jumped 4.7% after the company announced a joint venture with car seating leader Adient to make aircraft seats.

    IBM rose 2.9% after Barclays analysts upgraded the stock two notches to “overweight” and hiked its price target by $59 to $192.

    Several companies, however, saw their shares trade lower after underwhelming earnings reports and forecasts.

    Banks seesawed as Goldman Sachs and Bank of America reported disappointing results. The S&P 500 banks subsector fell in earlier intraday trading but ended Wednesday up 0.6%.

    Bank of America fell 0.2% after a $2.9 billion one-time tax charge nearly halved its reported profit.

    Goldman Sachs fell 1.9% after posting its first quarterly loss in 6 years on tax-related charges and a sharp drop in trading revenue.

    Ford fell 7.0% after the automaker reported full-year profit below estimates and provided a downbeat forecast.

    General Electric slipped 4.7%, extending losses from Tuesday, when it announced more than $11 billion in charges.Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 17 YTD
    S&P 500 SPX (INX) 2,802.56 +0.94% 2,673.61 +4.82%
    DJIA INDU 26,115.65 +1.25% 24,719.22 +5.64%
    NASDAQ IXIC 7,298.28 +1.03% 6,903.39 +5.72%

    Portfolio Indices

    USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
    ^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

    Index values

    :-) Our USD-denominated index closed at a record 3.263
    :-( Our AUD-denominated index is below its 18 Dec 2017 record of 4.117 because of the weak USD.

    Index Currency Today Change 31 Dec 17 YTD
    USD-denominated Index USD 3.263 +1.13% 3.068 +6.36%
    Valuation Rate USD/AUD 0.80437 +0.40% 0.78528 +2.43%
    AUD-denominated Index AUD 4.060 +0.72% 3.909 +3.87%

    Portfolio stock prices

    :-) Alphabet Class A closed on a record high of $1,139.10, up 0.74% on yesterday’s record of $1,130.70
    :-) Alphabet Class C closed on a record high of $1,131.98, beating its 12 Jan 2018 record of $1,122.26
    :-) Apple closed on a record high of $179.10, up 1.65% on yesterday’s record of $177.09
    :-) PayPal closed on a record high of $82.47, beating its 12 Jan 2018 record of $80.54
    :-) Visa closed on a record high of $121.98, up 1.32% on yesterday’s record of $120.39
    :-) VMware closed on a record high of $135.33, beating its 11 Jan 2018 record of $133.27

    Stock Ticker Today Change 31 Dec 17 YTD
    Alphabet A GOOGL $1,139.10 +0.74% $1,053.00 +8.17%
    Alphabet C GOOG $1,131.98 +0.91% $1,045.65 +8.25%
    Apple AAPL $179.10 +1.65% $169.23 +5.83%
    Amazon AMZN $1,295.00 -0.76% $1,169.54 +10.72%
    Ebay EBAY $37.99 +0.87% $37.76 +0.60%
    Facebook FB $177.6 -0.45% $176.46 +0.64%
    PayPal PYPL $82.47 +2.54% $73.61 +12.03%
    Twitter TWTR $24.56 -0.41% $24.01 +2.29%
    Visa V $121.98 +1.32% $114.02 +6.98%
    VMware VMW $135.33 +2.41% $125.32 +7.98%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) rose 0.2%.
    The EUR fell 0.4% to USD 1.2209.
    Britain’s GBP fell 0.5% to USD 1.3848, the highest since Jun 2016.
    Japan’s JPY rose 0.7 percent to 111.18 per USD, the first retreat in more than a week.
    Bloomberg

    AUD

    AUD movements
    ^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

    Oil and Gas Futures

    Futures prices

    Prices are as at 15:49 ET

    • NYMEX West Texas Intermediate (WTI): $63.91/barrel +0.28% Chart
    • ICE (London) Brent North Sea Crude: $69.31/barrel +0.23% Chart
    • NYMEX Natural gas futures: $3.26/MMBTU +4.31% Chart

    flag_australia AU: Housing Finance. Nov 2017

    Press Release Extract [au_housing]

    DWELLINGS FINANCED

    Value of Dwellings Financed

    The total value of dwelling commitments excluding alterations and additions (trend) was flat in November 2017 compared with October 2017, while the seasonally adjusted series rose 2.3% in November 2017.

    The total value of owner occupied housing commitments (trend) rose (up $14m, 0.1%) in November 2017. Rises were recorded in commitments for the purchase of new dwellings (up $3m, 0.2%) and commitments for the purchase of established dwellings (up $29m, 0.2%) while a fall was recorded in commitments for the construction of dwellings (down $18m, 0.9%). The seasonally adjusted series for the total value of owner occupied housing commitments rose 2.7% in November 2017.

    The total value of investment housing commitments (trend) fell (down $31m, 0.3%) in November 2017 compared with October 2017. Falls were recorded in commitments for the purchase of dwellings by individuals for rent or resale (down $75m, 0.8%) and commitments for the purchase of dwellings by others for rent or resale (down $22m, 2.3%), while a rise was recorded in commitments for the construction of dwellings for rent or resale (up $66m, 5.4%). The seasonally adjusted series for the total value of investment housing commitments rose 1.5% in November 2017.

    Number of Owner Occupied Dwellings Financed

    The number of owner occupied housing commitments (trend) rose 0.1% in November 2017, following a rise of 0.4% in October 2017. Rises were recorded in commitments for the refinancing of established dwellings (up 51, 0.3%), commitments for the purchase of established dwellings excluding refinancing (up 32, 0.1%) and commitments for the purchase of new dwellings (up 16, 0.5%), while a fall was recorded in commitments for the construction of dwellings (down 42, 0.7%). The seasonally adjusted series for the total number of owner occupied housing commitments rose 2.1% in November 2017.

    Number of Owner Occupied Dwellings Financed – State

    Between October 2017 and November 2017, the number of owner occupied housing commitments (trend) rose in Victoria (up 103, 0.6%), the Australian Capital Territory (up 15, 1.2%), South Australia (up 10, 0.3%) and Queensland (up 6, 0.1%), while falls were recorded in Western Australia (down 77, 1.4%), New South Wales (down 36, 0.2%), the Northern Territory (down 3, 0.9%) and Tasmania (down 1, 0.1%).

    The seasonally adjusted estimates rose in New South Wales (up 343, 2.0%), Queensland (up 325, 3.1%), the Australian Capital Territory (up 100, 8.6%), Victoria (up 91, 0.5%), South Australia (up 56, 1.5%) and Tasmania (up 7, 0.7%), while falls were recorded in Western Australia (down 191, 3.5%) and the Northern Territory (down 25, 8.5%).

    First Home Buyer Commitments

    In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 18.0% in November 2017 from 17.6% in October 2017. Between October 2017 and November 2017, the average loan size for first home buyers rose $3,300 to $327,100. The average loan size for all owner occupied housing commitments rose $11,000 to $388,900 for the same period.

    Number of Owner Occupied Dwellings Financed Excluding Refinancing

    The number of owner occupied housing commitments excluding refinancing (trend) was flat in November 2017, after a rise of 0.3% in October 2017. The seasonally adjusted series rose 2.4% in November 2017, after a fall of 0.7% in October 2017.

    PURPOSE OF FINANCE (OWNER OCCUPATION)

    Construction of dwellings

    The number of finance commitments for the construction of dwellings for owner occupation (trend) fell 0.7% in November 2017, following a fall of 0.5% in October 2017. The seasonally adjusted series rose 2.0% in November 2017, after a fall of 1.6% in October 2017.

    Purchase of new dwellings

    The number of finance commitments for the purchase of new dwellings for owner occupation (trend) rose 0.5% in November 2017, following a rise of 1.0% in October 2017. The seasonally adjusted series rose 2.6% in November 2017, after a fall of 2.1% in October 2017.

    Purchase of established dwellings (including refinancing across lending institutions)

    The number of finance commitments for the purchase of established dwellings for owner occupation (trend) rose 0.2% in November 2017, following a rise of 0.4% in October 2017. The seasonally adjusted series rose 2.1% in November 2017, after a fall of 0.3% in October 2017.

    Refinancing

    The number of refinancing commitments for owner occupied housing (trend) rose 0.3% in November 2017, following a rise of 0.5% in October 2017. The seasonally adjusted series rose 1.5% in November 2017, after a fall of 0.3% in October 2017.

    TYPE OF LENDER (OWNER OCCUPATION)

    Banks

    The number of commitments for owner occupied dwellings financed by banks (trend) was flat in November 2017, after a rise of 0.2% in October 2017. The seasonally adjusted series rose 2.2% in November 2017, after a fall of 0.9% in October 2017.

    Non-banks

    The number of commitments for owner occupied dwellings financed by non-banks (trend) rose 1.4% in November 2017, following a rise of 1.6% in October 2017. The seasonally adjusted series rose 1.3% in November 2017, following a rise of 3.6% in October 2017.
    The number of commitments for owner occupied dwellings financed by permanent building societies (trend) fell 0.2% in November 2017, after a rise of 0.7% in October 2017.

    HOUSING LOAN OUTSTANDINGS

    At the end of November 2017, the value of outstanding housing loans financed by Authorised Deposit-taking Institutions (ADIs) was $1,629b, up $6b (0.4%) from the October 2017 closing balance. Owner occupied housing loan outstandings financed by ADIs rose $6b (0.5%) to $1,069b and investment housing loan outstandings financed by ADIs rose $0.4b (0.1%) to $560b.

    Bank housing loan outstandings rose $6b (0.4%) during November 2017 to reach a closing balance of $1,592b. Owner occupied housing loan outstandings of banks rose $6b (0.6%) to $1,041b and investment housing loan outstandings of banks rose $0.5b (0.1%) to $551b.

    Australian Bureau of Statistics, “5609.0 Housing Finance. Nov 2017“, 17 Jan 2018 More

    flag_australia AU: Building Activity. Sep 2017

    Press Release Extract [au_building]

    BUILDING WORK DONE

    • The trend estimate of the value of total building work done fell 0.3% in the September 2017 quarter.
    • The seasonally adjusted estimate of the value of total building work done fell 1.0% to $27,573.0m in the September quarter, following a rise of 0.6% in the June 2017 quarter.

    New Residential Building Work Done

    • The trend estimate of the value of new residential building work done fell 0.6% in the September quarter. The value of work done on new houses fell 1.8% while new other residential building rose 0.8%.
    • The seasonally adjusted estimate of the value of new residential building work done rose 0.2% to $16,060.5m. Work done on new houses fell 2.1% to $8,291.0m, while new other residential building rose 2.9% to $7,769.5m.

    Non-Residential Building Work Done

    • The trend estimate of the value of non-residential building work done rose 0.8% in the September quarter.
    • The seasonally adjusted estimate of the value of non-residential building work done in the quarter fell 0.9%, following a rise of 1.2% in the June 2017 quarter.

    DWELLING UNITS COMMENCED

    Total Dwellings

    • The trend estimate for the total number of dwelling units commenced rose 0.4% in the September 2017 quarter following a fall of 0.7% in the June quarter.
    • The seasonally adjusted estimate for the total number of dwelling units commenced rose 0.7% to 54,927 dwellings in the September quarter following a rise of 4.3% in the June quarter.

    New Private Sector Houses

    • The trend estimate for new private sector house commencements rose 0.5% in the September quarter following a fall of 0.1% in the June quarter.
    • The seasonally adjusted estimate for new private sector house commencements fell 3.2% to 27,694 dwellings in the September quarter following a rise of 7.0% in the June quarter.

    NEW PRIVATE SECTOR OTHER RESIDENTIAL BUILDING

    • The trend estimate for new private sector other residential building commencements rose 0.9% in the September quarter following a fall of 1.0% in the June quarter.
    • The seasonally adjusted estimate for new private sector other residential building rose 5.4% to 26,188 dwellings in the September quarter following a rise of 2.9% in the June quarter.

    Australian Bureau of Statistics, “8752.0 Building Activity. Sep 2017“, 17 Jan 2018 More

    flag_australia AU: Engineering Construction Activity. Sep 2017

    Press Release Extract [au_construction]

    VALUE OF WORK DONE, CHAIN VOLUME MEASURES

    Total Work Done

    • The trend estimate for the value of total engineering construction work done rose 1.6% in the September 2017 quarter.
    • The seasonally adjusted estimate for the value of total engineering construction work done rose 33.6% in the September quarter to $34,295.8m.

    Work Done for the Private Sector

    • The trend estimate for the value of work done for the private sector fell 0.7% in the September quarter.
    • The seasonally adjusted estimate for the value of work done for the private sector rose 46.8% in the September quarter to $25,204.8m.

    Work Done for the Public Sector

    • The trend estimate for the value of work done for the public sector rose 4.5% in the September quarter.
    • The seasonally adjusted estimate for the value of work done for the public sector rose 6.9% in the September quarter to $9,091.0m.

    VALUE OF WORK COMMENCED, CURRENT PRICES

    The value of work commenced in the September quarter was $25,522.0m in original terms, an increase of 51.7% from the June quarter.

    Australian Bureau of Statistics, “8762.0 Engineering Construction Activity. Sep 2017“, 17 Jan 2018 More

    flag_europe EU: Construction. Nov 2017

    Press Release Extract [eu_cpi]

    In November 2017 compared with October 2017, seasonally adjusted production in the construction sector increased by 0.5% in the euro area (EA19) and by 0.6% in the EU28, according to first estimates from Eurostat. In October 2017, production in construction fell by 0.3% in the euro area and by 0.5% in the EU28.

    eu_construction_20180117

    In November 2017 compared with November 2016, production in construction increased by 2.7% in both zones.

    Monthly comparison by construction sector and by Member State

    The increase of 0.5% in production in construction in the euro area in November 2017, compared with October 2017, is due to civil engineering rising by 1.1% and building construction by 0.3%.

    In the EU28, the increase of 0.6% is due to building construction rising by 0.8%, while civil engineering fell by 0.3%.

    Among Member States for which data are available, the highest increases in production in construction were recorded in Poland (+3.2%), Slovenia (+2.2%) and the Netherlands (+1.8%). Decreases were observed in Hungary (-1.5%) and France (-0.6%).

    Annual comparison by construction sector and by Member State

    The increase of 2.7% in production in construction in the euro area in November 2017, compared with November 2016, is due to civil engineering rising by 3.0% and building construction by 2.7%.

    In the EU28, the increase of 2.7% is due to building construction rising by 3.3% and civil engineering by 1.1%.

    Among Member States for which data are available, the highest increases in production in construction were recorded in Hungary (+30.7%), Slovenia (+21.2%) and Poland (+16.0%). Decreases were observed in Romania (-4.1%) and France (-0.2%).

    Eurostat, “Nov 2017 compared with Oct 2017: Production in construction up by 0.5% in euro area, Up by 0.6% in EU28“, 17 Jan 2018 More

    flag_europe EU: Inflation (HICP). Dec 2017

    Press Release Extract [eu_cpi]

    Euro area annual inflation was 1.4% in December 2017, down from 1.5% in November. In December 2016, the rate was 1.1%. European Union annual inflation was 1.7% in December 2017, down from 1.8% in November. A year earlier the rate was 1.2%. These figures come from Eurostat, the statistical office of the European Union.

    eu_cpi_20170117

    The lowest annual rates were registered in Cyprus (-0.4%), Ireland and Finland (both 0.5%) and Denmark (0.8%). The highest annual rates were recorded in Lithuania and Estonia (both 3.8%) and the United Kingdom (3.0%). Compared with November 2017, annual inflation fell in twenty-three Member States, remained stable in four and rose in one.

    eu_cpi_states_20180117

    The largest upward impacts to the euro area annual inflation came from fuels for transport (+0.11 percentage points), tobacco (+0.06 pp) and milk, cheese & eggs (+0.05 pp), while telecommunication (-0.10 pp), garments and vegetables (-0.05 pp each) had the biggest downward impacts.

    Eurostat, “Annual inflation down to 1.4% in the euro area, Down to 1.7% in the EU. Dec 2017“, 17 Jan 2018 More

    flag_usa US: Usual Weekly Earnings of Wage and Salary Workers. Q4/2017

    Press Release Extract [us_wages]

    The U.S. Bureau of Labor Statistics reported today that median weekly earnings of the nation’s 114.2 million full-time wage and salary workers were $857 in the fourth quarter of 2017 (not seasonally adjusted). This was 0.9 percent higher than a year earlier, compared with a gain of 2.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.

    Data on usual weekly earnings are collected as part of the Current Population Survey, a nationwide sample survey of households in which respondents are asked, among other things, how much each wage and salary worker usually earns. Data shown in this release are not seasonally adjusted unless otherwise specified.

    Highlights from the fourth-quarter data:

    • Median weekly earnings of full-time workers were $857 in the fourth quarter of 2017. Women had median weekly earnings of $769, or 81.3 percent of the $946 median for men.
    • The women’s-to-men’s earnings ratio varied by race and ethnicity. White women earned 80.5 percent as much as their male counterparts, compared with Black women (96.0 percent), Asian women (72.3 percent), and Hispanic women (88.4 percent).
    • Among the major race and ethnicity groups, median weekly earnings for Black men working at full-time jobs were $681, or 69.3 percent of the median for White men ($982). The difference was less among women, as Black women’s median earnings ($654) were 82.7 percent of those for White women ($791). Overall, median earnings of Hispanics ($657) and Blacks ($666) were lower than those of Whites ($891) and Asians ($1,061).
    • Usual weekly earnings of full-time workers varied by age. Among men, those ages 55 to 64 and 45 to 54 had the highest median weekly earnings, at $1,130 and $1,117, respectively. For women, usual weekly earnings were highest for those age 35 to 64: weekly earnings were $855 for women age 35 to 44, $866 for women age 45 to 54, and $835 for women age 55 to 64. Workers age 16 to 24 had the lowest median weekly earnings, at $549.
    • Among the major occupational groups, persons employed full time in management, professional, and related occupations had the highest median weekly earnings—$1,475 for
      men and $1,052 for women. Men and women employed in service jobs earned the least, $602 and $499, respectively.
    • By educational attainment, full-time workers age 25 and over without a high school diploma had median weekly earnings of $531, compared with $714 for high school graduates (no college) and $1,278 for those holding at least a bachelor’s degree. Among college graduates with advanced degrees (professional or master’s degree and above), the highest earning 10 percent of male workers made $3,707 or more per week, compared with $2,719 or more for their female counterparts.
    • Seasonally adjusted median weekly earnings were $854 in the fourth quarter of 2017, down from the previous quarter ($866).

    Bureau of Labor Statistics, “Usual Weekly Earnings of Wage and Salary Workers. Q4/2017“, 17 Jan 2018 (10:00) More

    flag_usa US: Beige Book

    Press Release Extract [us_beige]

    Overall Economic Activity

    Reports from the 12 Federal Reserve Districts indicated that the economy continued to expand from late November through the end of the year, with 11 Districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic for a majority of contacts across the country. Most Districts reported that non-auto retail sales expanded since the last report and that auto sales were mixed. Some retailers highlighted that holiday sales were higher than expected. Residential real estate activity remained constrained across the country. Most Districts reported little growth in home sales due to limited housing inventory. Nonresidential activity continued to experience slight growth. Most manufacturers reported modest growth in overall business conditions. Reports indicated that some manufacturers increased capital expenditures over the reporting period. Most reporting Districts noted continued growth in transportation activity. Loan volumes in many Districts were steady. Among reporting Districts, agricultural conditions were mixed and energy contacts described a slight uptick in activity.

    Employment and Wages

    On balance, employment continued to grow at a modest pace since the previous report. Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth. Several Districts noted elevated demand for manufacturing and construction labor. Most Districts said that wages increased at a modest pace. A few Districts observed that firms were raising wages in a broader range of industries and positions since the previous report. Some Districts reported that firms expect wages to increase in the months ahead.

    Prices

    Most Districts reported modest to moderate price growth since the last report; exceptions were Chicago, which noted that prices increased only slightly while San Francisco noted price inflation was down slightly. Reports of pricing pressures were mixed across the country although several Districts noted increases in manufacturing, construction, or transportation input costs. Firms in some Districts noted an ability to increase selling prices. Retailers in some Districts reported modest price increases and there were reports of rising home prices across most of the country. Agriculture and energy commodity prices were mixed.

    Highlights by Federal Reserve District

    1. Boston: Business activity expanded modestly in the First District as 2017 came to a close. Most contacted retailers, manufacturers, and software and information technology (IT) services firms saw revenues increase, although a minority reported flat to slight declines in revenues or sales from a year earlier. Among responding retailers, online sales performed better than in-store sales. Revenue increases among software and IT services firms were strong, ranging from 10 percent to 20 percent year over year. Commercial and residential real estate markets continued much as in the last report, with commercial rents and residential prices increasing in general, while sales were mixed. Labor markets continued to be tight and difficulty in hiring workers has constrained expansion for some firms. Few contacts mentioned price changes. Most responding firms in the region retained a positive outlook for their business.
    2. New York: Economic activity in the Second District continued to grow at a moderate pace in the latest reporting period, and the labor market has remained tight. Input prices increased at a slightly faster pace, while selling prices continued to rise modestly. Fairly robust growth was reported in most service and distribution industries. Manufacturers reported that growth has slowed somewhat from its rapid pace during last summer and fall but remains fairly robust. Manufacturers also plan to increase capital spending substantially in 2018. Consumer spending has generally been flat. Housing markets have been steady overall, with continued weakness at the high end of both the sales and rental markets. Commercial real estate markets were also steady, on balance. Finally, banks reported a decline in loan demand, particularly from the household segment, while delinquency rates continued to decline across all loan categories.
    3. Philadelphia: Aggregate business activity in the Third District continued at a modest pace of growth during the current Beige Book period. Nonauto retail sales, tourist activity, manufacturing, and nonfinancial services grew modestly, while new home construction and existing home sales appeared to grow slightly. Little change was noted by contacts in nonresidential construction and nonresidential leasing markets. Auto sales appeared to have declined modestly. On balance, employment, wages, and prices continued to grow modestly. Most firms anticipated continued growth over the next six months—a somewhat higher percentage than during the prior period.
    4. Cleveland: Business activity in the Fourth District grew at a moderate pace since our last report. Labor markets continued to tighten. Challenges in attracting and retaining qualified workers, especially for low-skills jobs, contributed to wage pressures. Manufacturers and professional services providers experienced pushback when attempting to increase their selling prices. Retailers reported higher-than-expected sales for the early part of the holiday shopping season. Manufacturing output grew, albeit at a slow pace. Freight transport and nonfinancial services firms saw moderate to strong gains in activity. The housing and commercial real estate markets remained healthy.
    5. Richmond: Since our previous report, the Fifth District economy expanded at a moderate pace. Manufacturing activity picked up modestly, overall. Trucking firms continued to report robust growth compared to the prior period, while district ports experienced a mild seasonal slowdown, but strong year-over-year increases. Retailers saw a moderate increase in sales, with many stores citing better than expected holiday shopping this year. Tourist activity was strong in recent weeks, particularly at ski resorts. Home prices generally rose. Meanwhile, commercial real estate activity increased moderately. According to lenders, residential loan demand was flat while commercial loan demand rose moderately. Nonfinancial services firms reported moderate revenue growth. Labor demand increased modestly and firms had difficulties finding workers across a broad range of occupations. Wage pressures broadened moderately and many employers planned to raise starting wages. On balance, prices increased at a modest pace.
    6. Atlanta: Sixth District business contacts remained largely positive with most noting that economic conditions were improving at a modest pace over the reporting period. Most contacts expect continued slow and steady growth in the near-term. Business contacts experienced on-going labor market tightness but limited wage growth. Non-labor input costs increased slightly from the previous report. Contacts reported that holiday retail sales exceeded expectations, but auto sales softened. Reports from the hospitality sector were positive, reflecting strong advance bookings. Residential real estate brokers and builders noted mixed sales activity for both existing and new homes. Home prices rose and inventory levels were described as flat or down. Commercial real estate contacts reported increased demand in nonresidential construction, especially industrial and warehousing. Manufacturers indicated that new orders picked up since the previous report.
    7. Chicago: Growth in economic activity in the Seventh District picked up to a moderate pace in late November and December and contacts expected growth to continue at that pace over the next 6 to 12 months. Employment, consumer spending, and manufacturing production increased moderately, construction and real estate activity rose slightly, and business spending was unchanged. Wages increased modestly, prices rose slightly, and financial conditions improved some. Crop and dairy farmers continued to face challenging conditions.
    8. St. Louis: Reports from contacts indicate that economic conditions have continued to improve at a modest pace since our previous report. Labor market conditions remain tight, the pace of hiring remains slow, while wage growth has been moderate. Reports on consumer spending were positive. Residential real estate conditions have improved modestly after a few months of sluggish home sales. District bankers reported moderate loan growth across most categories. Unseasonably cold weather has negatively impacted the quality of winter wheat in the District.
    9. Minneapolis: Ninth District economic activity increased moderately overall since the last report. Employment declined slightly, but labor demand remained strong. Wage and price pressures were both moderate. The District economy showed growth in consumer spending, services, commercial construction, residential real estate, and manufacturing. Residential construction was mixed, energy and mining activity were steady, and agricultural conditions were stable at low levels.
    10. Kansas City: Economic activity and employment in the Tenth District increased at a modest pace in late November and December, and most contacts expected growth in the coming months. Labor shortages were reported by the majority of contacts in the services sector, while wages rose modestly across most sectors. Retail sales grew sharply since the previous survey, but auto sales, restaurant sales, and tourism activity declined moderately. Overall activity and capital spending plans within the manufacturing sector rose moderately. Contacts in the transportation and professional and high-tech sectors noted growth in sales, while wholesale trade firms reported a sharp decline in overall activity. Real estate activity in the District was mixed as the residential sector declined modestly while commercial real estate activity rose slightly. Banking contacts reported steady overall loan demand, unchanged loan quality and credit standards, and stable-to-increasing deposit levels. Activity in the District energy sector increased modestly since the last survey period, and expectations for capital spending, especially in exploration and development, were positive. Low crop prices continued to weigh on District farm income expectations, and winter wheat production expectations declined further.
    11. Dallas: The Eleventh District economy expanded at a robust pace over the past six weeks. A broad-based acceleration in growth was seen across the manufacturing, retail, nonfinancial services and energy sectors. Home sales continued to increase over the reporting period, and loan demand grew. Hiring picked up, and wage and price pressures remained elevated. Outlooks improved, although some uncertainty remained, and numerous contacts were optimistic that tax reform would provide a tailwind to business growth.
    12. San Francisco: Economic activity in the Twelfth District continued to expand at a moderate pace during the reporting period of mid November through early January. Overall price inflation edged down. Conditions in the labor market continued to tighten, and upward wage pressures increased. Sales of retail goods picked up noticeably during the holiday season, and growth in consumer and business services remained strong. Conditions in the manufacturing sector remained solid, and activity in the agriculture sector improved modestly. Contacts reported that residential real estate market activity remained robust and conditions in the commercial real estate sector were strong. Lending activity grew at a modest pace.

    US Federal Reserve, “Beige Book: Summary of Commentary on Current Economic Conditions By Federal Reserve District“, 17 Jan 2018 (14:00) More

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