Following is the executive summary of the U.S. macroeconomic indicators and trending topics for January 2023.
US Macroeconomic Indicators:
US Job Data – U.S. Job Growth Accelerated, Unemployment Rate Hits 53-year Low
The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment rose by 517,000 in January, and the unemployment rate changed slightly at 3.4 percent – a 0.1% decrease compared with last month. This was way above the Dow Jones estimate of 187,000 and December’s gain of 260,000.
Job increases were seen across the board, led by leisure and hospitality, retail, healthcare, and professional and business services.
The Consumer Price Index Inflation Rate Slowed to 6.4%
The Consumer Price Index for All Urban Consumers rose 0.5 percent in January on a seasonally adjusted basis after increasing 0.1 percent in December, as per the U.S. Consumer Price Index report.
Consumer price index data for January showed that prices for goods and services rose by 6.4% over the past 12 months, a slight change from the annual rate of 6.5% in December and a 40-year high of 9.1% in June.
US Services PMI Stands at 55.2%
Economic activity in the services sector grew in January after contracting in December following 30 consecutive months of growth. The Services PMI® registered 55.2 percent, a 6-percentage point increase compared to the seasonally adjusted December reading of 49.2 percent, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business.
A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent means it is generally contracting. Therefore, the January Services PMI® shows the overall economy is growing.
US Manufacturing PMI Stands at 47.4%; Contracts for the Third Month in January
According to the latest Manufacturing ISM Report On Business, “The January Manufacturing PMI® registered 47.4 percent, one percentage point lower than the seasonally adjusted 48.4 percent recorded in December. The January composite index reading reflects companies slowing outputs to better match demand in the first half of 2023 and prepare for growth in the year’s second half.
Of the six biggest manufacturing industries, Transportation Equipment registered growth in January.
Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
U.S. New Home Sales Post Third Straight Monthly Gain
- New home sales in the U.S. increased for the third month in December, according to a report released by the U.S. Census Bureau and the Department of Housing and Urban Development.
- Sales of new homes increased by 2.3 percent to an annual rate of 616,000 in December after climbing by 0.7 percent to a downwardly revised rate of 602,000 in November. The monthly increase in new home sales was partly due to declining mortgage rates and the strength in the Midwest, where new home sales soared by 35.2 percent to an annual rate of 73,000.
- According to the National Association of Realtors, sales of previously owned homes dropped 1.5% in December from the previous month.
- The layoff winter continues into the new year. An analysis of the Intellizence Layoff Dataset indicates companies continued to announce layoffs in January 2023. Major companies, including tech giants like Microsoft and Google, SAP, and IBM, are laying off a large numbers of employees. They have cited economic uncertainty and over-hiring as the reason for laying off employees.
- Over 395 companies announced the terminations of more than 118,271+ employees. Major layoff announcements were – Amazon (18000), Alphabet (12,000), Microsoft (10,000), Philips (6,000), and IBM (3,900).
U.S. Retail Sales Rebounded Sharply in January
Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences but not for price changes. There was a 3.0 percent increase in retail spending, ±0.5 percent from the previous month. Shoppers spent more on vehicles, furniture, clothing, and dining out
According to numbers released by the U.S. Department of Commerce, , retail sales rose 4.7% year over year in January. Retail sales grew in almost every category:
- E-commerce sales rose 5.7%.
- Home goods sales rose 4.5%.
- Apparel sales were up 6.6%.
- Sporting goods stores were up 6.9%.
- General merchandise stores were up 3.4%.
- Department store sales were up 3.1%.
- Electronics and appliance stores continued to decline, down 6.5%.
- Sales of vehicles and parts, typically big-ticket purchases, rose 5.9%.
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