The Conference Board Consumer Confidence Index, which had increased in December, rose sharply in January. The Index now stands at 102.9 (1985=100), up from 93.1 in December. Analysts were anticipating smaller increase to 95.2.The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index increased to 96.4 from 88.5 in December.
Separate report showed that sales of new single-family houses in December 2014 were at a seasonally adjusted annual rate of 481,000, above expected rate of 452,000. This is 11.6% above the revised November rate of 431,000 and is 8.8% above the December 2013 estimate of 442,000.
Wednesday's US session was marked by FOMC Statement. As it was largely expected Fed left its interest rates unchanged." As it was the case in December it was once again repeated that we have to "be patient in beginning to normalize the stance of monetary policy." "If incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated", it was emphasized.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run", it was said in conclusion.
On Thursday, Unemployment Claims figures were released. In the week ending January 24, the advance figure for seasonally adjusted initial claims was 265,000, a decrease of 43,000 from the previous week's revised level. Analysts were forecasting smaller decrease to 301,000. This is the lowest level for initial claims since April 15, 2000 when it was 259,000.
Friday's session brought GDP, Chicago PMI and Revised Consumer Confidence data. US GDP increased at an annual rate of 2.6% in the fourth quarter of 2014. Analysts were predicting bigger increase by 3.0%. The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The Chicago Business Barometer edged up 0.6 point to 59.4 in January from a revised 58.8 in December, following the publication of new seasonal factors earlier in the month. Analysts were forecasting decline to 57.7. Business activity was led by a modest advance in New Orders while Order Backlogs was the second largest contributor to the Barometer’s faster expansion. Production also increased between December and January following two consecutive falls.
The University of Michigan final consumer sentiment index rose to 98.1, the highest since January 2004, from 93.6 in December. This was in line with prelim reading and slightly below expected figure of 98.5. “Consumer optimism did not waver in late January,” Richard Curtin, director of the Michigan Survey of Consumers, said in a statement. “The improvement has been due to more favorable trends in income and employment as well as the more recent declines in gas prices.”
This week markets will be looking at:
ISM Manufacturing PMI (Monday 16:00)
ADP Non-Farm Employment Change (Wednesday 14:15)
ISM Non-Manufacturing PMI (Wednesday 16:00)
Trade Balance (Thursday 14:30)
Unemployment Claims (Thursday 14:30)
Non-Farm Employment Change/Unemployment Rate (Friday 14:30)
