The Conference Board reported on Tuesday that its February Consumer Confidence Index fell to 78.1, down from the 79.4 recorded in January. The Conference Board said that the declines were due in part to concerns over the short-term outlook for business conditions, jobs, and earnings. The Index was expected to come in at 80.8.
The Consumer Confidence Index measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
The National Association of Home Builders (NAHB) reported this morning that severe weather across the country this month held potential buyer traffic low for newly-built single family homes. The NAHB Housing Market Index fell by ten points from January to 46, well below the 56 expected. The NAHB also cited concerns about meeting ongoing and future demand due to a shortage of lots to build on and labor.
The New York Federal Reserve reported that business conditions across the region fell from January to February as companies continue to cite harsh weather as the culprit. The Empire State Manufacturing Index fell to 4.48 this month from the 12.5 recorded in January and below the 7.5 expected. The report revealed that the new orders index fell to -0.2 from the 11 recorded in January, while the employment component was essentially unchanged.
In corporate earnings news, soft-drink giant Coca-Cola reported that 4th quarter global sales volumes rose less than expected and declined in North America. Consumers continue to cut back on soda consumption and look for healthier alternatives. The soda maker has been responding by pushing juices, teas, water and other non-carbonated beverages. Coke’s revenues fell by 3.6% to $11.04 billion in the quarter, when estimates called for revenues of $11.31 billion.
Freddie Mac reported yesterday that the 30-year fixed conventional home loan rate was at 4.28% this week, slightly higher than the 4.23% recorded in the previous week. To obtain that 4.28% rate, a borrower would have to pay 0.7 in points/fees. The rise in rates comes after a five-week decline. The 15-yr rate was 3.33% when paying 0.7 in points/fees.
RealtyTrac reports that foreclosure activity across the nation increased by 8% from December to January, coming after a lull in activity during the holidays. However, activity was down 18% from January 2013 to January 2014, the 40th consecutive month where foreclosure activity declined on an annual basis.
Over in economic news, early February Consumer Sentiment held steady from the January reading to 81.2, above the 80.2 expected. Consumer optimism towards future prospects were tempered by concerns over their future finances. A spokesman said that the “full impact on household budgets from the harsh winter has yet to be registered.”
The Labor Department reported this morning that Americans filing for first time unemployment benefits rose in the latest week as the sector continues to jump hurdles. Weekly Initial Jobless Claims rose by 8,000 in the latest week to 339,000, which was above the 335,000 that was expected. The more reliable four-week moving average, which irons out seasonal abnormalities, increased to 336,750 from 333,250 in the previous week.
The cold weather and numerous snowstorms throughout the country kept consumers from spending at retail stores in January. The declines were led by slower automobile sales. Retail Sales fell 0.4% last month, below the unchanged estimate of 0.0%. Though it could be weather related, we are seeing a slowdown in the first quarter, cited one analyst.
Time Warner has agreed to be purchased by Comcast in a deal worth $45 billion, which will make it the largest cable provider in the U.S. The deal should draw scrutiny from federal regulators due to the size and control the company would have over the market. Comcast will pay Time Warner Cable shareholders $158.82 per share after the stock closed at $135.31 yesterday.
The Mortgage Bankers Association reported today that its Market Composite Index, a measure of total loan application volume, fell by 2% in the latest week despite a decline in home loan rates in the past month. The refinance index declined by 0.2%, while the purchase index fell by 5%. The Market Composite Index hit its lowest level at the end of 2013 since December of 2000.
The National Association of Realtors (NAR) released its latest quarterly report revealing that a vast majority of homeowners have seen significant gains in equity over the past two years. There were 119 of 164 metropolitan areas seeing gains based on closings in the fourth quarter of 2013, compared to the fourth quarter of 2012. However, the NAR said that “home prices have been rising faster than incomes, while mortgage rates are above the record lows of a year ago.”
The House of Representatives approved a bill to raise the nation’s debt ceiling for one year on Tuesday as Republicans agreed to follow President Obama’s advice to allow a debt limit increase without any conditions. The bill will go to the Senate today, where it is likely to pass, then to the President Obama to be signed into law.
Fannie Mae released its January 2014 National Housing Survey this week revealing that consumers are positive regarding access to mortgage credit while their views towards the economy is improving. 52% of respondents thought it would be easier for them to get a home mortgage today, an all-time high. The share of respondents who say the economy is on the right track increased 8 percentage points from last month, to 39%.
History was made today when new Federal Reserve Chair Janet Yellen became the first woman to head the central bank in its 100-year history. Ms. Yellen is in front of Congress this week testifying on the state of the U.S. economy along with monetary policy. Ms. Yellen did say that the labor markets have made some progress, but still has a lot of improvement ahead. Ms. Yellen did say that the Fed policy makers could pause on easing back on stimulus if the economy weakens.
The Labor Department reported this morning that its JOLTS report, Job Openings and Labor Turnover Survey, showing a second straight month fall in the hires rate, now at 3.2% and the lowest since June of 2012. Compared to December, the total job openings rate fell 0.1% to 2.8%. The hires rate is the number of hires during the month divided by the number of employees who worked or received pay for the pay period that includes the 12th of the month.