US Economic Indicators for Today: PPI Up 0.9%; Industrial Production Rose 0.4%; Capital inflows $75B

Here is a quick summary of a the key US economic indicators released today: Producer Price Index (PPI); Industrial production and capacity utilization; International capital flows; Housing confidence index; MBA Mortgage Applications Survey. 

The Producer Price Index (PPI) for Finished Goods increased 0.9% in December, following a 2.0% advance in November and a 1.6% decline in October, according to the Bureau of Labor Statistics of the U.S. Department of Labor report today.  

At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.5% in December after climbing 0.7% a month earlier, and the crude goods index increased 2.9% following a 15.7% gain in November. 

Among prices for finished goods:

  • the index for energy goods rose 2.5 percent in December compared with a 6.1-percent advance in the prior month. 
  • Price increases for finished goods other than foods and energy also slowed in December, gaining 0.2 percent following a 1.3-percent November advance. 
  • By contrast, the index for finished consumer foods moved up 1.7 percent after rising 0.1 percent in the previous month.

In 2006, finished goods prices increased 1.1% following a 5.4% rise in 2005. This slower rate of advance is attributable to the index for finished energy goods, which fell 2.0% in 2006 after climbing 23.9% a year earlier. 

By contrast, prices for finished goods other than foods and energy moved up 2.0% in 2006 following a 1.4% gain in 2005, and the index for finished consumer foods rose slightly more than it had a year earlier-1.8 percent and 1.7 percent, respectively. 

US Industrial production: rose 0.4% in December after a decrease of 0.1% in November, according to the Federal Reserve.  For the fourth quarter as a whole, industrial production decreased 0.5 percent (annual rate). 

  • In the manufacturing sector, output increased 0.7 percent in December, and most major industry groups registered gains. 
  • The output of utilities fell 2.6 percent, the result of relatively mild temperatures during the month, while the output of mines moved up 0.8 percent. 

Over the twelve months ending in December, total industrial production increased 3.0%, to a level that was 112.4% of its 2002 average, and total industrial capacity expanded 2.4 percent. 

The rate of capacity utilization in December, at 81.8%, was 0.5 percentage point above its year-earlier level and 0.8 percentage point above its 1972-2005 average. 

Treasury International Capital (TIC) data: Monthly net international capital inflows were $74.9 billion in November, with net foreign private flows at $65.8 billion and net foreign official flows at $9.1 billion, according to the U.S. Treasury.

Net foreign purchases of long-term securities were $68.4 billion.

  • Net foreign purchases of long-term U.S. securities were $107.4 billion.  Of this, net purchases by foreign official institutions were $6.5 billion, and net purchases by private foreign investors were $101.0 billion.
  • U.S. residents purchased a net $39.1 billion in long-term foreign securities.

Net foreign acquisition of long-term securities is estimated to have been $58.0 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $15.6 billion.  Foreign holdings of Treasury bills increased $9.5 billion.

Housing Market Index (HMI): Continuing on an upward trend that began in the final quarter of 2006, builder confidence rose 2 points in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI increased from an upwardly revised 33 in December to 35 in January, its highest level since July of 2006.

The index gauging current single-family home sales and the index gauging traffic of prospective buyers each gained three points, to 36 and 26 respectively, while the index gauging sales expectations for the next six months remained unchanged at 49.

MBA Mortgage Applications Survey: The Market Composite Index, a measure of mortgage loan application volume, was 667.2, a decrease of 0.6 percent on a seasonally adjusted basis from 671.1 one week earlier, according to The Mortgage Bankers Association (MBA)'s Weekly MBA Mortgage Applications Survey for the week ending January 12. 

On an unadjusted basis, the Index increased 28.9 percent compared with the previous week and was up 9.8 percent compared with the same week one year earlier.

The Refinance Index increased by 6.3 percent to 2045.8 from 1923.8 the previous week and the seasonally adjusted Purchase Index decreased by 7 percent to 439.7 from 472.8 one week earlier. 

The seasonally adjusted Conventional Index decreased by 0.8 percent to 993.2 from 1001.5 the previous week, and the seasonally adjusted Government Index increased 2.8 percent to 123.8 from 120.4 the previous week.

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