Transcript Fed challenge The current state of the u.s. economy

FED CHALLENGE
THE CURRENT STATE OF THE U.S. ECONOMY
A Closer View at Overall Economic Activity
A Presentation by Lissette Saca
•Housing
•Confidence
•Store Sales
•Manufacturing
•GDP
•Fed Balance Sheet
•Labor Market
•Price Level
Housing
MBA Purchase Applications
-Improvement in number of existing home sales
MBA Purchase Application
The Mortgage Bankers' Association
compiles various mortgage loan indexes.
The purchase applications index measures
applications at mortgage lenders.
Existing Home Sales
Existing Home Sales
-Rose 2.7 percent in January, 5.36 million units
-Median price fell sharply to $158,000
Existing home sales tally the number of
previously constructed homes,
condominium and co-ops in which a sale
closed during the month.
New Home Sales
New home sales measure the number of
newly constructed homes with a
committed sale during the month.
New Home Sales
-New home sales fell 12.6%
Confidence
Consumer Confidence
The Conference Board compiles a
survey of consumer attitudes on
present economic conditions and
expectations of future conditions.
Three thousand households across
the country are surveyed each
month.
State Street Investor Confidence
Index
The State Street Investor Confidence
Index measures confidence by
looking at actual levels of risk in
investment portfolios. This is not an
attitude survey.
Consumer Confidence
-Increased from 60.6 to 70.4
State Street Investor Confidence Index
-Lack of interest in US equities
-Turmoil in the Middle East
Store Sales
ICSC-Goldman Store Sales
-Increase in store sales by 2.6% in last week
ICSC-Goldman Store Sales
This weekly measure of comparable
store sales at major retail chains,
published by the International
Council of Shopping Centers, is
related to the general merchandise
portion of retail sales. It accounts for
roughly 10 percent of total retail
sales.
Redbook
A weekly measure of sales at chain
stores, discounters, and department
stores. It is a less consistent
indicator of retail sales than the
weekly ICSC index.
-Increased Y/Y sales from 2.7% to 3.0%
Redbook
-Increase in sales from 2.2% to 2.7%
-Valentine’s Day and presidents’ day sales
Manufacturing
Richmond Fed
Manufacturing Index
This survey provides a
comprehensive set of
indicators of business
conditions within the fifth
region’s manufacturing
sector. The survey provides
participants’ knowledge of
recent changes in
manufacturing activity as
well as insights into
expected developments in
six months.
Index Increase
-Increase due to rise in
--shipments
--new orders
--backlog orders
--lead times
--employment
Gross Domestic
Product (GDP)
GDP
-New report to be released tomorrow
Gross Domestic Product
-Current Q/Q % change SAAR: 3.2%
Gross Domestic Product
-Forecasted consensus level is 3.4% increase, which lies
within the 3.2%-3.6% consensus range
(GDP) is the broadest
measure of aggregate
economic activity and
encompasses every sector
of the economy.
GDP represents the total
value of the country's
production during the
period and consists of the
purchases of domesticallyproduced goods and
services by individuals,
businesses, foreigners and
government entities.
Fed Balance Sheet
Fed Balance Sheet
The Fed's balance sheet is a
report showing factors
supplying reserves into the
banking system and factors
absorbing (using) reserve
funds. Essentially, the
balance sheet shows the
various Fed programs for
injecting liquidity into the
economy and how much
the Fed has used each for
adding or withdrawing
reserves.
Fed Balance Sheet
-Total assets W/W change 24.5%
Labor Market
Jobless Claims
Jobless Claims
-Improved this past week as new claims levels fell from
410k to 391k, exceeding the expected level of 405k.
New unemployment claims
are compiled weekly to
show the number of
individuals who filed for
unemployment insurance
for the first time. An
increasing (decreasing)
trend suggests a
deteriorating (improving)
labor market. The fourweek moving average of
new claims smoothes out
weekly volatility.
-The four-week average confirms the improvement,
falling a sizable 16,500 to 402,000 for a nearly 30,000
decline from the month-ago level.
Labor Market
-Unemployment to remain above 9% for most of the year.
-While job growth will accelerate, the labor force will grow
even more.
Price Level
Money Supply
The monetary aggregates
are alternative measures of
the money supply by
degree of liquidity.
Changes in the monetary
aggregates indicate the
thrust of monetary policy
as well as the outlook for
economic activity and
inflationary pressures
Money Supply
-M2 W/W change $8.4 Billion
Price Level
EIA Petroleum Status
EIA Petroleum Status Report
-Increase in oil inventories W/W change 0.8M barrels
Report
-Reports state as positive
The Energy Information
Administration (EIA)
provides weekly
information on petroleum
inventories in the U.S.,
whether produced here or
abroad. The level of
inventories helps
determine prices for
petroleum products.
Works Cited
Barron’s Economic Calendar for the week of 2/21/2011
FRED-St. Louis Fed
Owens, Andrew. "2011 U.S. Macroeconomic Outlook ."
Economic Commentary. UNC-Econ Workbench, 19
Jan. 2011. Web. 24 Feb. 2011.
<http://www.unc.edu/~maguilar/EconWorkbench
/EconomicOutlook2.pdf>.
Zandi, Mark. "U.S. Macro Outlook: A Recipe for Optimism."
Dismal Scientist, 9 Feb. 2011. Web. 24 Feb. 2011.
<http://www.economy.com/dismal/pro/article.asp
?cid=197089>.