Last updateTue, 25 Feb 2020 5pm

U.S. GDP Increases 2.1% for Second Straight Quarter

Real GDP in the U.S. increased at an annual rate of 2.1% in the fourth quarter of 2019, according to the advance estimate released by the Department of Commerce. In the third quarter, real GDP also increased 2.1%.

In the fourth quarter, a downturn in imports, an acceleration in government spending, and a smaller decrease in nonresidential investment were offset by a larger decrease in private inventory investment and a slowdown in personal consumption expenditures.

Consumer Optimism Jumps in January

The Conference Board Consumer Confidence Index increased in January, following a moderate increase in December. The Index now stands at 131.6, up from 128.2 (an upward revision) in December.

“Consumer confidence increased in January, following a moderate advance in December, driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects,” said Lynn Franco, senior director, economic indicators, at The Conference Board. “Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020.”

Orders for Durable Goods Rose in December

New orders for manufactured durable goods in December increased $5.7 billion or 2.4% to $245.5 billion, the U.S. Department of Commerce announced. This increase, up two of the last three months, followed a 3.1% November decrease. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders decreased 2.5%.

Growth in Texas Manufacturing Activity Picks Up

Growth in Texas factory activity accelerated in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose seven points to 10.5, suggesting stronger output growth than last month.

Other measures of manufacturing activity also pointed to an acceleration in January. The new orders index shot up 16 points to 17.6, its highest reading in 15 months. The growth rate of orders index returned to positive territory, rising from -5.0 to 6.1. The capacity utilization and shipments indexes pushed further positive, coming in at 11.5 and 8.6, respectively.

Manufacturing Expansion Slowed in January

Manufacturing firms noted a slower improvement in operating conditions in January, as signaled by a slight dip in the IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) from 52.4 to 51.7 in January. Notably, the latest upturn in the health of the sector was the softest since last October. Although output continued to rise at a moderate pace, new business growth was only marginal as both domestic and foreign client demand softened.


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