Philadelphia Fed manufacturing index drops to five-month low in January The numbers: A gauge of Philadelphia-area manufacturing fell to five-month low of 22.2 in January, the Philadelphia Fed said Thursday. That’s still well above the zero reading, as any positive figure indicates improving conditions.
What happened: Confidence in the manufacturing sector, while strong, is returning to more normal levels. The new-orders component slumped 18 points to a reading of 10.1. Shipments did rise, growing to 30.3.
The big picture: Manufacturing is coming off a pretty good year, helped by a recovery in energy prices and a drop in the U.S. dollar.
What they’re saying: “I think it is safe to say that manufacturers are expecting to expand their businesses substantially this year,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.
Market reaction: The data was released at the same time as housing starts and jobless claims, and U.S. stock futures were pointing to a slightly ..Read More →

Sterling Surges on Brexit Optimism Again, Breaking Key Resistance Level Sterling trades notably high against Dollar and Yen today on more optimism over Brexit. GBP/USD reaches as high as 1.3942 so far and looks set to take out 1.3835 key resistance decisively. That would carry long term bullish implications. But for now, Euro and Swiss Franc are trading as the strongest ones for today. There is no change in Dollar's fate for the moment as its rebound again lacks follow through momentum. The greenback is weighed down by talks of global diversifications away from Dollar assets, including China and others. And Euro is an important destination of the funds.
US initial jobless claims dropped -41k to 220k in the week ended January 13, well below expectation of 251k. That's also the lowest level in 45 years since 1973. Continuing claims rose 76k to 1.95m in the week ended January 6. Housing starts dropped to 1.19m annualized rate in December while building permits ..Read More →

As Fannie and Freddie reform talk heats up, their regulator speaks up Fannie Mae and Freddie Mac should be reorganized as private, utility-like entities, and the government should provide an explicit guarantee for mortgages in order to preserve the popular 30-year fixed-rate loan, the regulator of the two government-sponsored mortgage enterprises said this week.
Mel Watt, director of the Federal Housing Finance Agency, the regulator created to oversee the two enterprises at the height of the 2008 financial crisis, had previously held back when asked for his views on the appropriate shape for the future of the housing-finance system, saying such a determination was up to Congress.
But as the situation for Fannie FNMA, +6.37% and Freddie FMCC, +6.83% became more fraught, that has changed.
Watt in May told the Senate Banking Committee that reform was “urgently” needed. “These conservatorships are not sustainable and they need to end as soon as Congress can chart the way forward on hou..Read More →

U.S. housing starts fizzle at end of 2017 Justin Sullivan/Getty Images Home builders were not as busy in December, but construction in 2017 hit a 10-year high. The numbers: Construction on new houses fell 8.2% in December to a 1.19 million annual rate. Economists polled by MarketWatch has forecast housing starts to total 1.28 million.
Single-family starts dropped 11.8%, but construction on buildings with five or more units rose 2.6%.
Permits for future construction were basically flat at 1.30 million.
Still, 2017 was a very good year for home builders. Permits, housing starts and the number of new homes completed all hit the highest levels since 2007.
What happened: Home construction fell in all four regions, led by a 14.2% drop in the South and a 4.3% decline in the Northeast.
The South, the biggest home-building region in the U.S., had seen a burst of new construction following a pair of major hurricanes at the end of the summer and some dropoff might have been expected. Severe..Read More →

Jobless claims crash to 45-year low, fall 41,000 to 220,000 Getty Images The number of Americans losing their jobs each week fell in early 2018 to the lowest level in 45 years. The numbers: Initial U.S. jobless claims tumbled by 41,000 to 220,000 in mid-January, marking the biggest one-week decline since 2009. The number of new claims also touched the lowest level since February 1973.
Economists polled by MarketWatch has forecast claims to total 250,000 in the seven days ended Jan. 13. The level of claims gives a rough idea of how many people are losing their jobs.
The more stable monthly average of claims, meanwhile, declined by a smaller 6,250 to 244,500, the government said Thursday.
The number of people already collecting unemployment benefits, known as continuing claims, rose by 76,000 to 1.95 million.
What happened: In early January claims fell sharply in New York, Michigan, Pennsylvania and Georgia.
Initial jobless claims are now near the lowest level since the early 1970s..Read More →