Inflation Nearly Unchanged in December
On January 20, the Bureau of Labor Statistics reported that the Consumer Price Index (CPI) was unchanged in December, and has risen 3.0 percent over the last 12 months. Although the 3.0 percent rise over the past year is the greatest increase since 2007, prices have declined or been flat since October, largely because of a drop in gasoline costs. Additionally, the core CPI, which excludes energy and food costs rose 0.1 percent and is 2.2 percent above last year’s level. This is slightly above the Federal Reserve’s target of one to two percent annual increases in the core CPI. Similar to November, the energy index declined in December and offset increases in other areas.

Link: News Release
 

Housing Data Continues to Improve
On January 20, the National Association of Realtors reported that existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from 4.39 million in November. This equals a 3.6 percent rise compared to December 2010. For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010. Additionally, total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November.

On January 19, the National Association of Home Builders (NAHB) reported that its NAHB/Wells Fargo Housing Market Index (HMI) for newly built, single-family homes continued to climb for a fourth consecutive month in January, rising four points to 25, the highest level the index has attained since June of 2007. Additionally, each of HMI’s three component indexes registered a fourth consecutive monthly improvement in January. The component gauging current sales conditions rose three points to 25, which was its highest point since June of 2007. The component gauging sales expectations in the next six months also rose three points, to 29, its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June of 2007.  The HMI also posted gains in all four regions in January, including a nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest, a two-point gain to 27 in the South and a five-point gain to 21 in the West.

Also January 19, the Department of Commerce reported that production of new single-family homes rose 4.4 percent to a seasonally adjusted annual rate of 470,000 units in December. This is third consecutive monthly increase and the fastest pace of single-family housing starts since April of 2010.

Links: Existing Home Sales News Release, Home Builder Confidence, Single Family Home Production

Weekly Jobless Claims Continue Downward Trajectory
On January 19, the Department of Labor reported that jobless claims fell 50,000 to 352,000 in the week ending January 14. 352,000 represents the lowest level of jobless claims since April 2008. Bloomberg News reported that a survey of 41 economists projected 384,000 jobless claims. A Labor Department spokesman did note that weekly claims tend to be highly volatile this time of year following the end of the holiday shopping season. As such, the Department also publishes a four-week average of jobless claims, which smoothes out fluctuations. This measure also decreased, to 379,000 last week from 382,500.

Link: News Release

World Bank Revises 2012 Growth Forecast Downward
On January 18, the World Bank stated that it was lowering its projections for economic growth in 2012. Overall, global growth is now projected to be 2.5 percent and 3.1 percent for 2012 and 2013, respectively. Specifically, the Bank lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the Euro Area), down from its June estimates of 6.2 and 2.7 percent (1.8 percent for the Euro Area), respectively.