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

 

 

 

RISKS AND OTHER IMPORTANT CONSIDERATIONS

This report is provided for general information purposes only and should not be construed as specific legal, tax, or financial planning advice. All opinions and views constitute judgments or relevant information as of the date of writing and such information may become outdated or superseded at any time without notice. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy. This information should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit, and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions,especially during periods of rising interest rates.

This entry was posted in Economic Roundup. Bookmark the permalink.