Chandler Bond Market Review

Economic Roundup February 2014

Consumer Prices

In December, overall CPI inflation rose to 1.5% on a year-over-year basis from 1.2% in November. The year-over-year Core CPI (CPI less food and energy) was unchanged at 1.7%. The core inflation rate is still trending below the Fed’s long-term goal of 2.0% and remains below the trigger rate for policy action of 2.5%.

Retail Sales

In December, Retail Sales rose 4.1% on a year-over-year basis versus up 4.2% in November. On a month-over-month basis, Retail Sales excluding autos and gas rose 0.6% in December which exceeded the consensus forecast of 0.3%.

Labor Market

The January employment report was weaker than expected as payrolls rose by just 113,000 versus the 180,000 consensus estimate. Unfavorable weather may have been a contributing factor. Meanwhile, the unemployment rate declined to 6.6% from 6.7%, despite an increase in the labor force. Net revisions for job growth in November and December were +34,000. Average nonfarm payroll growth over the past 3 months has been 154,000 per month. Private payrolls increased by 142,000 in January while government jobs contracted by 29,000.

Housing Starts

Single-family housing starts fell 7.0% in December after rising 20.0% in November. Unfavorable weather may have been at least partially to blame for the December decline.

 Economic Roundup





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