Tuesday was marked by Chicago PMI and CB Consumer Confidence figures. Manufacturing activity in the Chicago-area unexpectedly fell in January, nearing the mark for stagnation and dampening optimism over the U.S. economic outlook, industry data showed on Tuesday. In a report, the Institute for Supply Management (ISM) said its Chicago purchasing managers’ index decreased by 4.3 points to a seasonally adjusted 50.3 this month from a reading of 54.6 in December. That was its lowest reading since May 2016. Analysts had expected the index to rise 0.4 points to 55.0 in January.
The Consumer Confidence Index decreased to 111.8 in January after reaching a 15-year high in December, according to a monthly survey released on Tuesday. Economists expected the index to hit 113 in January, according to Thomson Reuters, down from 113.7 in the prior month. "The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers' income prospects. Consumers' assessment of current conditions, on the other hand, improved in January. Despite the retreat in confidence, consumers remain confident that the economy will continue to expand in the coming months," said Lynn Franco, Director of Economic Indicators at The Conference Board, in a release.
Wednesday brought ADP job figures, Manufacturing PMI and Fed's rate decision. Private sector employment increased by 246,000 jobs from December 2016 to January 2017 according to the January ADP National Employment Report. “The U.S. labor market is hitting on all cylinders and we saw small and midsized businesses perform exceptionally well,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
The January PMI registered 56 percent, an increase of 1.5 percentage points from the seasonally adjusted December reading of 54.5 percent. The New Orders Index registered 60.4 percent, an increase of 0.1 percentage point from the seasonally adjusted December reading of 60.3 percent. The Production Index registered 61.4 percent, 2 percentage points higher than the seasonally adjusted December reading of 59.4 percent.
Federal Reserve officials left interest rates unchanged while acknowledging rising confidence among consumers and businesses following Donald Trump’s election victory. “Measures of consumer and business sentiment have improved of late,” the Federal Open Market Committee said in its statement Wednesday following a two-day meeting in Washington. Policy makers reiterated their expectations for moderate economic growth, “some further strengthening” in the labor market and a return to 2 percent inflation.
The Fed provided little direction on when it might next raise borrowing costs, as officials grapple with the uncertainty created by a new presidential administration. Policy makers in December penciled three rate hikes into their 2017 forecasts, but committee members differ over assumptions regarding the extent to which tax cuts, spending and regulatory rollbacks proposed by Trump and Republicans might boost growth and inflation.
On Thursday Unemployment Claims figures were released. In the week ending January 28, the advance figure for seasonally adjusted initial claims was 246,000, a decrease of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 259,000 to 260,000. The 4-week moving average was 248,000, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 245,500 to 245,750.
Friday's session was marked by NFP data Total nonfarm payroll employment increased by 227,000 in January, and the unemployment rate was little changed at 4.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, construction, and financial activities. Both the number of unemployed persons, at 7.6 million, and the unemployment rate, at 4.8 percent, were little changed in January.
This week markets will be looking at:
Unemployment Claims (Thursday 14:30)
Prelim UoM Consumer Sentiment (Friday 16:00)
