Economic confidence in the US is at multi-year highs. (The Daily Shot)
- Investors Business Daily Economic Optimism Index:
- Gallup Economic Confidence Index (as of December 5th):
The recent increase in economic confidence appears mostly to be a reaction to the presidential election — chiefly among Republicans, who are much more likely to view the economy positively after Donald Trump’s victory. Republicans have shifted dramatically from a decidedly negative evaluation of the economy before the election to a positive one after it.
- The Trump Trade is alive and well, with banks and small caps continuing to outperform.
U.S. Productivity Rose at 3.1% Rate in Third Quarter The cost of labor in the U.S. grew more quickly than previously thought in the spring and summer, the latest sign that Americans’ wages are picking up.
(…) But the government made big revisions to unit labor costs, a measure of the expense imposed on firms to compensate workers for their output. Such costs grew at a 0.7% rate in July through September, more than double the agency’s initial estimate of a 0.3% gain. (…)
Unit labor costs grew at a 6.2% pace in the second quarter, up from the prior estimate of a 3.9% increase. (…)
Before the third quarter, productivity had declined for three consecutive quarters. Productivity was flat in the third quarter compared with a year earlier. From 1947 to 2015, productivity grew an average 2.2% a year. (…) (Table from Haver Analytics)
Manufacturing sector orders jumped 2.7% during October (1.3% y/y) following a 0.6% September gain, revised from 0.3%. Durable goods bookings increased 4.6% (1.8% y/y), revised from the advance estimate of a 4.8% rise. Transportation orders increased 12.0% (5.1% y/y) as orders for nondefense aircraft & parts nearly doubled m/m (26.3% y/y).
Orders outside of the transportation sector increased 0.8% (0.5% y/y).
Unfilled orders increased 0.7% (-1.1% y/y) after three straight months of 0.2% decline. Outside of transportation, order backlogs improved 0.2% (0.7% y/y).
However, after removing defense and aircraft orders (which tend to be volatile), the situation isn’t as rosy. On a year-over-year basis, capital goods orders and shipments continue to languish. (The Daily Shot)
The volume of U.S. home construction loans grew at the fastest rate in more than two years in the third quarter, according to federal data, a sign that tight postrecession lending conditions might be easing for home builders. (…)
Access to capital has been especially difficult for small private builders, who are responsible for nearly two-thirds of single-family home construction across the country. (…)
The latest quarterly data on home construction loans studied by the NAHB shows that the volume of outstanding loans increased by 4.8% in the third quarter, to $68.3 billion. That marks 14 consecutive quarters of growth for such loans.
A separate NAHB survey of builders and developers found that credit conditions were improving last quarter, with 23% of those surveyed reporting easing credit conditions and 71% saying conditions remained about the same. (…)
U.S. Trade Deficit Widened Sharply in October The U.S. trade deficit widened sharply in October as exports weakened following a summer surge, and imports jumped, setting up a likely drag on overall economic growth in the final months of 2016.
The trade gap for goods and services surged 17.8% from a month earlier to a seasonally adjusted $42.6 billion in October, the Commerce Department said Tuesday. That was the steepest one-month rise since March 2015, and took the deficit to its highest level since June. (…)
Exports fell 1.8% from September, the largest drop since January, and imports rose 1.3% in October. The fall in exports included declining shipments of soybeans, corn and consumer goods while the import rise included stronger domestic demand for foreign-made pharmaceuticals, cellphones and capital goods.
On a non-seasonally adjusted basis, imports from China and Mexico hit their highest levels in a year. Exports to China were the most since December 2013 and exports to Japan were at the highest level since August 2014. (…)
Exports during the first 10 months of the year were down 3.1% from the same period in 2015, and imports declined 2.9% year-to-date, according to Tuesday’s report. (…)