Comerica Economic Weekly

U.S. economic data released at the end of March remain consistent with our expectation that indicators will generally improve this spring as weather renormalizes. We expect to see an ongoing moderate economic expansion for this year, after a weak first quarter. Real GDP growth for the nearly complete 2014Q1 is expected to be somewhat muted, obscuring more positive elements of the economy. Three factors will keep 2014Q1 real GDP growth below potential. First, was the weather, which dragged on almost all economic series this winter, including job creation and auto sales. Second, is the drag from federal spending. The good news is that last fall’s two-year budget deal put some money back in the coffers for federal discretionary spending this year, but we will still see a drag from federal discretionary spending through the first half of this year. Third, is the expected inventory correction. Inventory accumulation significantly boosted GDP growth through the second half of 2013. This cannot continue indefinitely. There will be a correction, but we do not know exactly when it will happen. We expect to see some drag from inventories in 2014Q1.

Personal income growth for February was moderate, increasing nominally by 0.3 percent. Wage and salary growth was subdued at 0.2 percent for the month, reflecting weak job gains this winter. After adjusting for inflation, real consumer spending increased by 0.2 percent, consistent with the slight uptick that we saw in unit auto sales for February.

Consumer attitudes are going in two directions at once. According to the Conference Board, consumer confidence for February improved, continuing the upward trend in that series visible since last November. However,  according the University of Michigan, consumer sentiment dipped slightly in March.

Real GDP growth for the fourth quarter of 2013 was revised up slightly to 2.6 percent from 2.4 percent. This is largely a backwards looking revision with only minor implications for our 2014 outlook.

Initial claims for unemployment insurance dipped by 10,000 for the week ending March 22, to hit 311,000. This is a level consistent with ongoing moderate job creation. Continuing claims fell by 53,000 for the week ending March 15, reflecting the rollback of extended unemployment insurance benefits.

New home sales for February eased by 3.3 percent to hit a 440,000 unit annual rate. This came after a stronger-than-expected January report. The Pending Home Sales Index for February dipped by 0.8 percent. The Case-Shiller 20-City Composite House Price Index for January showed 13.2 percent year-over-year growth. On a monthly basis, prices fell in 12 out of the 20 cities. Housing markets remain tight in most cities.

New orders for durable goods increased by 2.2 percent in February. Commercial aircraft orders climbed after falling through December and January. Total shipments of durable goods also improved in February.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: CMAEconWeekly032814.

Share 'Comerica Economic Weekly' on Delicious Share 'Comerica Economic Weekly' on Digg Share 'Comerica Economic Weekly' on Facebook Share 'Comerica Economic Weekly' on Google+ Share 'Comerica Economic Weekly' on LinkedIn Share 'Comerica Economic Weekly' on Pinterest Share 'Comerica Economic Weekly' on reddit Share 'Comerica Economic Weekly' on StumbleUpon Share 'Comerica Economic Weekly' on Twitter Share 'Comerica Economic Weekly' on Add to Bookmarks Share 'Comerica Economic Weekly' on Email Share 'Comerica Economic Weekly' on Print Friendly
Posted in General, United States, Weekly | Tagged , | Comments Off

Comerica Bank’s Arizona Index Continues to Grow in January

Comerica Bank’s Arizona Economic Activity Index expanded in January, up 1.3 percentage points to a level of 101.6. January’s index reading is 30 points, or 42 percent, above the index cyclical low of 71.3. The index averaged 96 points for all of 2013, nine points above the average for full-year 2012. December’s index reading was unchanged at 100.3.

“Our Arizona Index improved in January, for the third consecutive month. The state economy, dominated by the Phoenix-Mesa-Scottsdale metropolitan statistical area, is showing consistent improvement in fundamental indicators. Job growth has been above the U.S. average, and steady. Real estate prices are recovering from the housing crash of 2007-08,” said Robert Dye, Chief Economist at Comerica Bank. “House prices are still a long way from the frothy peaks of 2006, but they are now on par with 2004 values, before the big price inflation began. Payroll jobs in January were up 2.3 percent statewide over the previous 12 months, better than the U.S. average rate of 1.7 percent.”

AZ Index 0314

For a PDF version of the Arizona Economic Activity Index click here: ArizonaIndex_0314.

Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Delicious Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Digg Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Facebook Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Google+ Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on LinkedIn Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Pinterest Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on reddit Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on StumbleUpon Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Twitter Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Add to Bookmarks Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Email Share 'Comerica Bank’s Arizona Index Continues to Grow in January' on Print Friendly
Posted in Arizona, Economic Activity, General, Indices | Tagged , | Comments Off

Comerica Bank’s Florida Index Declines in January

Comerica Bank’s Florida Economic Activity Index dipped 2.2 percentage points in January, to a level of 117.2. January’s index reading is 37 points, or 45 percent, above the index cyclical low of 80.6. The index averaged 115 in 2013, 10 points above the average for all of 2012. December’s index reading was revised down from 119.5 to 119.4.

“Our Florida Economic Activity Index ticked down in January, consistent with the soft winter economic data seen in much of the rest of the country. We expect to see ongoing improvement to the Florida economy through the remainder of this year as both residential and commercial real estate markets continue to heal,” said Robert Dye, Chief Economist at Comerica Bank. “Payroll job growth is now trending well above the national average. For the year ending in January, Florida payroll jobs were up by 2.6 percent, compared to the U.S. average rate of 1.7 percent for the month.”

FL Index 0314

For a PDF version of the Florida Economic Activity Index click here: FloridaIndex_0314.

Share 'Comerica Bank’s Florida Index Declines in January' on Delicious Share 'Comerica Bank’s Florida Index Declines in January' on Digg Share 'Comerica Bank’s Florida Index Declines in January' on Facebook Share 'Comerica Bank’s Florida Index Declines in January' on Google+ Share 'Comerica Bank’s Florida Index Declines in January' on LinkedIn Share 'Comerica Bank’s Florida Index Declines in January' on Pinterest Share 'Comerica Bank’s Florida Index Declines in January' on reddit Share 'Comerica Bank’s Florida Index Declines in January' on StumbleUpon Share 'Comerica Bank’s Florida Index Declines in January' on Twitter Share 'Comerica Bank’s Florida Index Declines in January' on Add to Bookmarks Share 'Comerica Bank’s Florida Index Declines in January' on Email Share 'Comerica Bank’s Florida Index Declines in January' on Print Friendly
Posted in Economic Activity, Florida, General, Indices | Tagged , | Comments Off

Comerica Bank’s Texas Index Cooled in January

Comerica Bank’s Texas Economic Activity Index decreased 0.9 percentage points in January to a level of 110.2. The January reading is 39 points, or 54 percent, above the index cyclical low of 71.6. The index averaged 105 points for all of 2013, three points above the average for full-year 2012. December’s index reading was unchanged at 111.1.

“Our Texas Index cooled slightly in January, due to volatility in residential buildings permits. Permits from November through January eased after spiking last October. The overall trend in residential building permits still looks good, reflecting the strong Texas economy,” said Robert Dye, Chief Economist at Comerica Bank. “Most other components of our Texas index were positive in January, including payroll job growth and the drilling rig count. After some winter-weather-related drag, the broader U.S. economy is improving and this will be a positive for Texas this spring.”

TX Index 0314

For a PDF version of the Texas Economic Activity Index, click here: TexasIndex_0314.

Share 'Comerica Bank’s Texas Index Cooled in January' on Delicious Share 'Comerica Bank’s Texas Index Cooled in January' on Digg Share 'Comerica Bank’s Texas Index Cooled in January' on Facebook Share 'Comerica Bank’s Texas Index Cooled in January' on Google+ Share 'Comerica Bank’s Texas Index Cooled in January' on LinkedIn Share 'Comerica Bank’s Texas Index Cooled in January' on Pinterest Share 'Comerica Bank’s Texas Index Cooled in January' on reddit Share 'Comerica Bank’s Texas Index Cooled in January' on StumbleUpon Share 'Comerica Bank’s Texas Index Cooled in January' on Twitter Share 'Comerica Bank’s Texas Index Cooled in January' on Add to Bookmarks Share 'Comerica Bank’s Texas Index Cooled in January' on Email Share 'Comerica Bank’s Texas Index Cooled in January' on Print Friendly
Posted in Economic Activity, General, Indices, Texas | Tagged , | Comments Off

Comerica Bank’s Michigan Index Down Again in January

Comerica Bank’s Michigan Economic Activity Index continued to decrease in January, down 1.6 percentage points to a level of 125.6. January’s reading is 54 points, or 74 percent, above the index cyclical low of 72.1. The index averaged 126 for all of 2013, 12 points above the index average for 2012. December’s index reading was revised slightly up from 127.1 to 127.2.

“Our Michigan Index fell again in January, its third consecutive decline. Brutal weather has taken its toll on the Michigan economy this winter,” said Robert Dye, Chief Economist at Comerica Bank. “Automobile assemblies dropped in January. This reflected both local weather conditions and the drag from weaker-than-expected auto sales nationally. Payroll employment for Michigan was essentially unchanged from June 2013 to January 2014. We expect U.S. auto sales to improve this spring and that will be a positive for Michigan. House prices are firming up statewide and that is also a broad support for the state’s economy.”

MI Index 0314

For a PDF version of the Michigan Economic Activity Index click here: Michigan0314.

Share 'Comerica Bank’s Michigan Index Down Again in January' on Delicious Share 'Comerica Bank’s Michigan Index Down Again in January' on Digg Share 'Comerica Bank’s Michigan Index Down Again in January' on Facebook Share 'Comerica Bank’s Michigan Index Down Again in January' on Google+ Share 'Comerica Bank’s Michigan Index Down Again in January' on LinkedIn Share 'Comerica Bank’s Michigan Index Down Again in January' on Pinterest Share 'Comerica Bank’s Michigan Index Down Again in January' on reddit Share 'Comerica Bank’s Michigan Index Down Again in January' on StumbleUpon Share 'Comerica Bank’s Michigan Index Down Again in January' on Twitter Share 'Comerica Bank’s Michigan Index Down Again in January' on Add to Bookmarks Share 'Comerica Bank’s Michigan Index Down Again in January' on Email Share 'Comerica Bank’s Michigan Index Down Again in January' on Print Friendly
Posted in Economic Activity, General, Indices, Michigan | Tagged , | Comments Off

Comerica Bank’s California Index Dips in January

Comerica Bank’s California Economic Activity Index declined in January, down 1.6 percentage points to a level of 110.1. January’s reading is 37 points, or 51 percent, above the index cyclical low of 72.7. The index averaged 106 points for all of 2013, five points above the average for all of 2012. December’s index reading was revised slightly up from 111.4 to 111.7.

“Our California Economic Activity Index dipped in January as most index components eased. Payroll job growth in California has temporarily stalled, showing little change from November through January. Residential building permits also eased in January after solid gains over the previous three months,” said Robert Dye, Chief Economist at Comerica Bank. “Increasing private construction activity and firming property prices are a fundamental positive for California. Also, the tech sector continues to be a strong performer. The Silicon Valley 150 stock index was up 17 percent in January over the previous 12 months. We expect the California economy to improve through 2014.”

CA Index 0314

For a PDF version of the California Economic Activity Index click here: CaliforniaIndex_0314.

Share 'Comerica Bank’s California Index Dips in January' on Delicious Share 'Comerica Bank’s California Index Dips in January' on Digg Share 'Comerica Bank’s California Index Dips in January' on Facebook Share 'Comerica Bank’s California Index Dips in January' on Google+ Share 'Comerica Bank’s California Index Dips in January' on LinkedIn Share 'Comerica Bank’s California Index Dips in January' on Pinterest Share 'Comerica Bank’s California Index Dips in January' on reddit Share 'Comerica Bank’s California Index Dips in January' on StumbleUpon Share 'Comerica Bank’s California Index Dips in January' on Twitter Share 'Comerica Bank’s California Index Dips in January' on Add to Bookmarks Share 'Comerica Bank’s California Index Dips in January' on Email Share 'Comerica Bank’s California Index Dips in January' on Print Friendly
Posted in California, Economic Activity, General, Indices | Tagged , | Comments Off

Comerica Economic Weekly

Generally improving economic data for February and into early March support the view that bad weather was a factor in December and January, and that metrics will tend to improve this spring.

The residential construction report for February indicated that permits for new construction accelerated after dipping through December and January. Permits increased by 7.7 percent to hit an annual rate of 1,018,000 units. Housing starts for February were essentially unchanged at a 907,000 unit annual pace.

Overall consumer prices were little changed in February as the headline CPI gained just 0.1 percent. Over the previous 12 months, the CPI was up a tame 1.1 percent. Core CPI (all items less food and energy) was also up just 0.1 percent in February. Over the past year core CPI has increased by 1.6 percent.

Industrial production for February was stronger than expected, increasing by a solid 0.6 percent. Manufacturing output increased by 0.8 percent, boosted by a rebound in auto production. Utility output dipped by 0.2 percent in February, following a January surge.

The Conference Board’s Leading Economic Index increased by 0.5 percent in February, after stalling in December and January. The coincident and lagging indexes were also positive for the month. Summed up, the leading, coincident and lagging indicators gained a combined 1.0 percent in February, after gaining 0.7 percent in January and 0.3 percent in December.

Existing home sales edged down in February, as we expected. February sales dipped by 0.4 percent to a 4.60 million unit rate. Four negative factors were in play in February – mortgage rates above recent historic lows, bad weather, soft jobs data and less activity from institutional buyers and investors. As other economic metrics, including job creation, step up this spring, we expect existing home sales to first stabilize near current levels, and then resume an upward track boosted by rising demand from traditional buyers.

Initial claims for unemployment insurance increased by 5,000 for the week ending March 15, to hit a level of 320,000. Initial claims appear to be stabilizing at a level consistent with ongoing moderate job growth, another signal that the winter freeze out in job creation will prove to be temporary.

The Philadelphia Federal Reserve Bank’s Business Outlook Survey showed that current manufacturing conditions improved in early March, after deteriorating in February.

The Federal Open Market Committee voted Wednesday to reduce its asset purchase program by another $10 billion, to $55 billion per month, beginning in April. The Fed remains on track to eliminate this program by the end of this year, possibly by the end of October. The fed funds rate remains set near zero. Forward guidance for the fed funds rate has been modified, eliminating the 6.5 percent unemployment rate threshold.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: CMAEconWeekly032114.

Share 'Comerica Economic Weekly' on Delicious Share 'Comerica Economic Weekly' on Digg Share 'Comerica Economic Weekly' on Facebook Share 'Comerica Economic Weekly' on Google+ Share 'Comerica Economic Weekly' on LinkedIn Share 'Comerica Economic Weekly' on Pinterest Share 'Comerica Economic Weekly' on reddit Share 'Comerica Economic Weekly' on StumbleUpon Share 'Comerica Economic Weekly' on Twitter Share 'Comerica Economic Weekly' on Add to Bookmarks Share 'Comerica Economic Weekly' on Email Share 'Comerica Economic Weekly' on Print Friendly
Posted in General, United States, Weekly | Tagged , | Comments Off

February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up

Indicators Positive, Fed Signals Ongoing Unwind from Extraordinary Policy

  • The Leading Economic Index for February increased by 0.5 percent, suggesting a spring thaw is coming.
  • Existing Home Sales for February fell slightly to a 4.60 million unit annual rate.
  • Initial Claims for Unemployment Insurance gained 5,000 for the week ending March 15, to hit 320,000.
  • The Federal Open Market Committee voted yesterday to reduce asset purchases in April.

U.S economic metrics released this morning were generally positive and suggestive of an impending spring thaw. The Conference Board’s Leading Economic Index increased by 0.5 percent in February, after stalling in December and January. The coincident and lagging indexes were also positive for the month. The five factors that pushed the leading index up in February were interest rate spread, residential building permits, the leading credit index, manufacturers’ new orders for consumer goods and manufacturers’ new orders for capital goods ex-aircraft. Summed up, the leading, coincident and lagging indicators gained a combined 1.0 percent in February, after gaining 0.7 percent in January and 0.3 percent in December.

Existing home sales edged down in February, as we expected. February sales dipped by 0.4 percent to a 4.60 million unit rate. Four negative factors were in play in February – mortgage rates above recent historic lows, bad weather, soft jobs data and less activity from institutional buyers and investors. As other economic metrics, including job creation, step up this spring, we expect existing home sales to first stabilize near current levels, and then resume an upward track, boosted by rising demand from traditional buyers.

Initial claims for unemployment insurance increased by 5,000 for the week ending March 15, to hit a level of 320,000. Initial claims appear to be stabilizing at a level consistent with ongoing moderate job growth, another signal that the winter freeze out in job creation will prove to be temporary. Continuing claims for the week ending March 8 increased by 41,000 to hit 2,889,000. We see an overall declining trend in continuing claims since early January, as expected, following the elimination of federal benefits for extended unemployment.

The Philadelphia Federal Reserve Bank’s Business Outlook Survey showed that current manufacturing conditions improved in early March, after deteriorating in February.

As widely expected, the Federal Open Market Committee voted yesterday to reduce its asset purchase program by another $10 billion, to $55 billion per month. The reduced monthly rate of purchases will begin in April. The Fed remains on track to eliminate this program by the end of this year, possibly by the end of October. The fed funds rate remains set near zero. Forward guidance for the fed funds rate has been modified. The Fed has backed away from an explicit unemployment rate target. We expect the fed funds rate to remain near zero until the second or third quarter of 2015. As the Fed gets closer to raising the fed funds rate, they will modify their forward guidance again, alerting markets to the forthcoming change. At this time the FOMC is not formally signaling any changes to fed funds rate policy. However, at her first post-meeting press conference, FOMC chairwoman Janet Yellen suggested that the first increase in the fed funds rate might come about six months after the end of its asset purchase program. Six months after the end of October 2014, is the end of April 2015. The FOMC could announce an increase in the fed funds rate target at its end of April 2015 or mid-June 2015 meetings. The FOMC acknowledged the economic drag from the unusually harsh winter. Other economic comments by the FOMC were generally positive.

Market Reaction: Equity markets are up after a weak opening. Treasury yields are up at the long end of the yield curve. The 10-Year Treasury bond yield is up to 2.78 percent. NYMEX crude oil is down to $99.19/ barrel. Natural gas futures are down to $4.36/mmbtu.

For a PDF version of this Comerica Economic Alert click here: Leading Indicators 03-20-14.

Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Delicious Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Digg Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Facebook Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Google+ Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on LinkedIn Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Pinterest Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on reddit Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on StumbleUpon Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Twitter Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Add to Bookmarks Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Email Share 'February Leading Indicators, Existing Home Sales, March UI Claims, Fed Wrap-Up' on Print Friendly
Posted in Daily, General, United States | Tagged , , , , | Comments Off

February Residential Construction, Consumer Prices, Industrial Production

Permits and Production Up, Prices Tame, Fed Set to Taper

  • February Housing Starts were little changed, down by 0.2 percent to a 907,000 unit annual rate.
  • Permits for new residential construction increased in February by 7.7 percent to a 1,018,000 unit pace.
  • The Consumer Price Index increased by 0.1 percent in February. Core CPI also gained 0.1 percent.
  • Industrial Production for February climbed a strong 0.6 percent as auto production rebounded.

Benign economic data for February support the view that bad weather was a factor in December and January, and that metrics will tend to improve in March. This last bit of U.S. data before the Federal Open Market Committee’s meeting today and Wednesday is supportive of another round of QE tapering. We expect the Fed to announce another $10 billion reduction in their asset purchase program, bringing purchases down to $55 billion per month until the next meeting at the end of April. The fed funds rate stays near zero into next year. Also, we expect to see a modification to forward guidance about the fed funds rate. It will no longer be linked to an explicit unemployment rate threshold.

The good news in the residential construction report for February is that permits for new construction accelerated after dipping through December and January. Permits increased by 7.7 percent to hit an annual rate of 1,018,000 units. Multifamily permits jumped by 27 percent to a 407,000 unit rate, the best performance in that category since June 2008. We are seeing that comparison more and more as data is normalizing to pre-recession readings. Housing starts for February were essentially unchanged at a 907,000 unit annual pace.

Overall consumer prices were little changed in February as the headline CPI gained just 0.1 percent. Over the previous 12 months, the CPI was up a tame 1.1 percent. Core CPI (all items less food and energy) was also up just 0.1 percent in February. Over the past year core CPI has increased by 1.6 percent.

Industrial production for February was stronger than expected, increasing by a solid 0.6 percent. Manufacturing output increased by 0.8 percent, boosted by a rebound in auto production. Vehicle assemblies sagged in January after a strong run through November and December. February’s assembly rate of 11.4 million vehicles was just a little below the November-December average of 11.5 million units. Utility output dipped by 0.2 percent in February, following a January surge.

Market Reaction: Equity markets opened with gains. The yield on 10-Year Treasury bonds is up to 2.69 percent. NYMEX crude oil is up to $98.44/barrel. Natural gas futures are down to $4.45/mmbtu.

Economic Alert 031814

For a PDF version of this Comerica Economic Alert click here: Housing Starts 031814.

Share 'February Residential Construction, Consumer Prices, Industrial Production' on Delicious Share 'February Residential Construction, Consumer Prices, Industrial Production' on Digg Share 'February Residential Construction, Consumer Prices, Industrial Production' on Facebook Share 'February Residential Construction, Consumer Prices, Industrial Production' on Google+ Share 'February Residential Construction, Consumer Prices, Industrial Production' on LinkedIn Share 'February Residential Construction, Consumer Prices, Industrial Production' on Pinterest Share 'February Residential Construction, Consumer Prices, Industrial Production' on reddit Share 'February Residential Construction, Consumer Prices, Industrial Production' on StumbleUpon Share 'February Residential Construction, Consumer Prices, Industrial Production' on Twitter Share 'February Residential Construction, Consumer Prices, Industrial Production' on Add to Bookmarks Share 'February Residential Construction, Consumer Prices, Industrial Production' on Email Share 'February Residential Construction, Consumer Prices, Industrial Production' on Print Friendly
Posted in Daily, General, United States | Tagged , , , | Comments Off

Comerica Economic Weekly

The perception of uncertainty in the U.S. and global economies appears to have increased. That is not to say actual uncertainty (whatever that is), as measured by the Economic Policy Uncertainty index, has increased. In fact, according to the monthly Economic Policy Uncertainty Index, uncertainty has been on a decreasing trend since last October when the index spiked at the time of the federal government shut-down. The daily uncertainty index does show a local spike around March 9, then it receded through March 14. The political and military events in the Ukraine have added to business uncertainty here in the U.S., but only moderately.

The combination of the October federal government shutdown, bad weather from December through early March, trouble in some small emerging markets  and the volatile geopolitical situation in the Ukraine appears to have heightened the perception of uncertainty.  U.S. stock market indexes declined through this week. The heightened perception of uncertainty, let’s call that twitchiness, obscures some recent positive metrics.

According to the Federal Reserve, the net worth of households and non-profits increased by 14 percent($10.6 trillion) in 2013, hitting a level of $80.7 trillion, surpassing the pre-recession peak. As wealth accumulates, households feel more comfortable satisfying demand and utilizing credit (a positive wealth effect). This is a very powerful and broad-based support for consumer spending.

Also, according to the Federal Reserve, commercial and industrial bank loans increased strongly in January and February. That is a positive leading indicator for business investment and job creation.

Retail sales increased in February by 0.3 percent reversing a two-month decline. Gains were spread across most major categories.

Unemployment insurance claims for the week ending March 8 fell by 9,000 to hit a level of 315,000. Continuing claims for the week ending March 1 declined by 48,000 to hit 2,855,000. On a related note, Senate negotiators have reached an agreement to renew long-tem unemployment benefits. A vote in the Senate could come in late March. Passage in the House is uncertain.

The Producer Price index for final demand declined by 0.1 percent in February. Over the last 12 months the final demand PPI is up 0.9 percent. The goods component increased in February, driven by gains in food and energy prices. The services component dipped as prices for wholesalers and retailers eased.

The National Federation of Independent Business’s Small Business Optimism index dipped February. Employment plans were still positive, but weaker than they were in January. Capital spending plans remain somewhat muted in this index despite the gain in lending reported by the Federal Reserve.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: CMAEconWeekly031414.

Share 'Comerica Economic Weekly' on Delicious Share 'Comerica Economic Weekly' on Digg Share 'Comerica Economic Weekly' on Facebook Share 'Comerica Economic Weekly' on Google+ Share 'Comerica Economic Weekly' on LinkedIn Share 'Comerica Economic Weekly' on Pinterest Share 'Comerica Economic Weekly' on reddit Share 'Comerica Economic Weekly' on StumbleUpon Share 'Comerica Economic Weekly' on Twitter Share 'Comerica Economic Weekly' on Add to Bookmarks Share 'Comerica Economic Weekly' on Email Share 'Comerica Economic Weekly' on Print Friendly
Posted in General, United States, Weekly | Tagged , | Comments Off