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Landaas & Company newsletter January edition now available.
Advisors on This Week’s Show
Brian Kilb
Jeff Peterson
(with Max Hoelzl and Joel Dresang)Week in Review (Feb. 13-17, 2012)
Significant economic indicators & reports
Monday
No major announcements
Tuesday
Retail sales continued growing but at a slower pace in January. The Commerce Department reported sales increased less than analysts had forecast with automotive, furniture and online sales declining after strong showings in December. Year-to-year, retail sales remained well above the long-term average rate, suggesting further economic expansion.
In a separate report, Commerce said business inventories rose in December at the highest rate in four months. But sales grew even faster, which means businesses are running lean and could have to boost production and employment to keep up with consumer demand.
Wednesday
Although consumer spending drives 70% of U.S. economic growth, export-oriented manufacturing has pushed the recovery and expansion coming out of the Great Recession. The Federal Reserve said industrial production in January stayed even with the output in December, led by continued strength in manufacturing. Utilities production has been down because of a mild winter, and the mining sector eased off from elevated levels. The nation was using nearly 79% of its production capacity, allowing room to expand further without threatening inflation.
Thursday
Employment conditions continue to look better as the moving four-week average for initial unemployment claims stayed at levels not seen since mid-2008. The Labor Department reported that the average fell for the 10th time in 11 weeks and was below 400,000 for the 14th week in a row.
Aided by historically low mortgage rates and an unseasonably warm winter, the annualized rate of housing starts rose 1.5% in January and was nearly 10% higher than in January, 2011, the Commerce Department reported. Multi-family units continued to fuel housing’s meandering up from recessionary lows. Building permits, a leading indicator of construction, also rose from December and the year before, but not as much as analysts had anticipated.
Inflation at the wholesale level moderated in January as both food and energy costs declined, the Labor Department reported. The Producer Price Index was up 4.1% from January 2011, the lowest rate in a year. The 12-month rate for the core index, excluding food and energy prices, stayed even at 3%.
Friday
The broadest measure of inflation edged up in January after staying unchanged the previous two month. The Bureau of Labor Statistics said energy costs rose for the first time in four months, pushing the Consumer Price Index higher, but the year-to-year inflation rate dropped to its lowest point since March. The core CPI, which overlooks volatile food and energy costs, also advanced in January. And though the annual rate for the core CPI rose to its highest level since September 2008, it was well below the 53-year average of 3.9%, suggesting inflation remains in check.
The national economic outlook got better as the Conference Board said its Leading Economic Index gained for the fourth month in a row in January. The 10-component measure showed widespread continuation of positive momentum from the last three months of 2011. Economists for the business research group said indicators including manufacturing orders and monetary stimulus point to further economic expansion at least through mid-year.
Where the Markets Closed for the Week
- Nasdaq – 2,952, up 28 points or 1.6%
- Standard & Poor’s 500 – 1,361, up 18 points or 1.3%
- 10-year U.S. Treasury Note – 2.01%, up 0.04 point
- Dow Jones Industrial Average – 12,950, up 149 points or 1.2%
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