4th quarter GDP; January’s industrial production; December’s personal income and outlays, trade deficit, durable goods, new home construction, and new home sales…

This week’s key reports were the advance estimate of 4th quarter GDP and the December report on Personal Income and Spending, both from the Bureau of Economic Analysis; other widely watched reports released this week included the Commerce Department’s report on our International Trade for December; the December report on Industrial Production and Capacity Utilization from the Fed, and the advance report on durable goods for December, the New Residential Construction report for November and December (pdf), and the November and December reports on new home sales, with all of those from the Census Bureau…

The week also saw the release of the first two regional Fed manufacturing surveys for February: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index slipped from +7.7 in January to +7.1 in February, still its fourth positive reading in five months, meaning that a slightly smaller plurality of Second District manufacturers continue to see improvement in various facets of their businesses… meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell from +12.6 in January to +16.3 in February, highest reading since September, indicating that a larger majority of that region’s manufacturers reported increases in general business activity this month than last..

4th Quarter GDP Grew at a 1.4% Rate on Increase of Personal Services and Non-residential Fixed Investment

The Advance Estimate of 4th Quarter GDP from the Bureau of Economic Analysis estimated that the real output of goods and services produced in the US grew at a 1.4% annual rate from the output of the 3rd quarter, when our real output grew at a 4.4% rate, as growth in personal consumption of nondurable goods and of services, and of private investment and inventories were offset by shrinking durable goods, net exports and a big contraction of the federal government (due to the shutdown)… For the entire year, our economy grew at a 2.2% rate, down from the 2.8% growth rate of 2024, and down from the 2.9% growth rate of 2023. In current dollars, our fourth quarter GDP grew at a 5.14% annual rate, increasing from what would work out to be a $31,098.0 billion a year rate in the 3rd quarter to a $31,490.1 annual rate in the 4th quarter, with the headline 1.4% annualized rate of increase in real output arrived at after annualized inflation adjustments averaging 3.6%, known in aggregate as the GDP deflator, were computed from the price changes of the GDP components and applied to their current dollar change…

As is usual with an advance estimate, the BEA cautions that the source data for GDP is incomplete and also subject to revisions, which have averaged +/-0.6% in either direction before the third estimate for the quarter is released, which should be two months from now.. Also note that December’s construction and non-durables factory inventory data have yet to be reported or formally estimated, and that the BEA assumed a $0.2 billion monthly decrease in residential construction, a $0.4 billion monthly decrease in non-residential construction, that there was no change in public construction, and a $0.1 billion monthly decrease in nondurable manufacturing inventories for December before they estimated the 4th quarter’s output (see the Key source data and assumptions (xls) for more details).

While we review the details for the 4th quarter below, remember that the news release for the Advance Estimate reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a compounded change a bit over 4 times of that what actually occurred over the 3 month period, and that the prefix “real” is used to indicate that each change has been adjusted for inflation using price indexes chained from 2017 prices, and then that all percentage changes in this report are calculated from those ‘2017 dollar’ figures, which would be better thought of as a quantity indexes than as any actual dollar amounts, since the change in real GDP is not a monetary metric. For our purposes, all the data that we’ll use in reporting the changes here comes directly from the pdf for the advance estimate of 4th quarter GDP, which we find linked on the BEA GDP landing page, which also offers links to just the tables on Excel and other technical notes. Specifically, we refer to table 1, which shows the real percentage change in each of the GDP components annually and quarterly since the 1st quarter of 2022, table 2, which shows the contribution of each of the components to the GDP growth figures for those quarters and years, table 3, which shows both the current dollar value and the inflation adjusted value in 2017 dollars of each of those components back to the 4th quarter of 2024, and table 4, which shows the change in the price indexes for each of the GDP components….

Our personal consumption expenditures (PCE), which are used in the computation of almost 70% of GDP, grew at a 5.33% rate in current dollars in the 4th quarter, and were then deflated to indicate a 2.4% real growth rate of goods and services consumed, after an annualized PCE price index increase averaging 2.9% was computed to adjust that consumer spending for inflation.. Consumers outlays for durable goods were virtually unchanged in current dollars, while prices for those durable goods averaged 0.8% higher, and thus the BEA found that the real consumption of consumer durable goods shrunk at a 0.9% rate, as real growth in consumption of recreational goods and vehicles at an 7.6% rate mostly offset a 9.3% shrinkage rate in real consumption of motor vehicles and parts… At the same time, consumer spending for non-durables increased at a 3.0% rate, and that was adjusted for weighted non-durable goods prices that rose at a 2.6% rate to show that that real output of consumer non-durable goods grew at a 0.4% rate, as increased real consumption of clothing and non-durable goods other than food and energy offset a decrease in consumption of both groceries and gasoline. Meanwhile, the 6.9% nominal dollar growth rate of consumer outlays for services was deflated by an average 3.3% increase in prices for personal services to show that the real output of consumer services grew at a 3.1% annual rate, as a 5.6% real growth rate for health care services accounted for about 40% of the 4th quarter’s growth in services. As a result of those changes in growth from the 3rd to the 4th quarter, the decrease in our output of durable goods indicated by our adjusted spending on them subtracted 0.01 percentage point from the GDP growth rate, while the increase in the output of non-durable goods added 0.05 percentage points to GDP, and increased personal services added 1.59 percentage points to the growth rate of the economy in the 4th quarter..

The change in the other components of the change in GDP is computed by the BEA in the same manner that we have just illustrated for computing real PCE; ie, the annualized increase (or decrease) in current dollar spending for the quarter is adjusted with the annualized inflation factor for that component, yielding the change in real units of goods or services produced during the quarter, at an annual rate.. Thus, real gross private domestic investment, which had been virtually unchanged in the 3rd quarter, grew at a real 3.8% annual rate in the 4th quarter, as the real growth rate of fixed investments grew at a 2.6% annual rate in the 4th quarter, after growing at an 0.8% rate in the 3rd quarter, while the shrinkage in private inventories was less than in the 3rd quarter and hence added to 4th quarter GDP… Among fixed investments, real non-residential fixed investment grew at 3.7% rate even as real investment in non-residential structures shrunk at 1.1% rate and subtracted 0.07 percentage points from 4th quarter GDP, as real investment in equipment grew at 3.2% rate and added 0.17 percentage points from 4th quarter GDP, and real investment in intellectual property grew at 7.4% rate and added 0.40 percentage points to GDP. Meanwhile, real residential investment shrunk at 1.5% rate and subtracted 0.06 percentage points from 4th quarter GDP, after residential investment had shrunk at 7.1% rate in the 3rd quarter and subtracted 0.26 percentage points from that quarter’s growth. For an easy to read table as to what’s included in each of those GDP investment categories, see the NIPA Handbook, Chapter 6, page 3…..

Meanwhile, real private inventories shrunk at an inflation adjusted $13.6 billion rate over the 4th quarter, after shrinking at an inflation adjusted $23.9 billion rate in the 3rd quarter, and as a result the rounded $10.3 billion positive change in real inventory growth added 0.21 percentage points to the 4th quarter’s growth rate, after an $8.9 billion negative change in real inventory growth in the 3rd quarter had subtracted 0.12 percentage points from that quarter’s GDP. However, since positive growth in inventories indicates that less of the goods produced during the quarter were left in storage or sitting on a shelf, the $10.3 billion increase in their growth in turn means real final sales of GDP were smaller by that amount, and hence real final sales of GDP grew at a 1.2% rate in the 4th quarter, down from the real final sales growth rate of 4.5% in the 3rd quarter, when decreased inventory growth meant that more of the quarter’s goods were being sold…

Real exports and real imports both decreased slightly in the 4th quarter, but our imports fell by a bit more, hence adding to 4th quarter GDP. Our real exports of goods and services shrunk at a real 0.9% annual rate in the fourth quarter, after our exports had increased at a 9.6% rate in the 3rd quarter, while our real imports shrunk at a real 1.3% annual rate in the third quarter, after shrinking at a 4.4% rate in the 3rd quarter. As you’ll recall, increases in exports are added to GDP because they are part of our production that was not consumed or added to investment in our country (& hence not counted in the GDP computation elsewhere), while increases in imports subtract from GDP because they represent either consumption or investment that was added to another GDP component that shouldn’t have been, because that portion of consumption or investment was not produced here. Thus the 4th quarter decrease in real exports conversely subtracted 0.10 percentage points from 4th quarter GDP, after the 3rd quarter increase in exports had added 1.00 percentage points to third quarter GDP. On the other hand, since imports subtract from GDP, their decrease at an 1.3% rate conversely added 0.18 percentage points to 4th quarter GDP, after the third quarter import decrease had added 0.62 percentage points to that quarter’s growth….As a result, our slightly better trade balance added a rounded net of 0.08 percentage points to the 4th quarter’s GDP growth, after our improving trade balance in the third quarter trade had added 1.62 percentage points to GDP growth in that quarter..

Finally, real consumption and investment by all branches of government decreased at a 5.1% annual rate in the 4th quarter, after growing at a 2.2% rate in the 3rd quarter, as federal government consumption and investment shrunk at a 16.6% rate, while state and local consumption and investment grew at a 2.4% rate. Inflation adjusted federal spending for defense shrunk at a 10.8% rate and subtracted 0.42 percentage points from 4th quarter GDP growth, while real non-defense federal consumption and investment shrunk at a 24.1% rate and subtracted 0.72 percentage points from GDP. Note that federal government outlays for social insurance are not included in this GDP component; rather, they are included within personal consumption expenditures only when such funds are spent on goods or services, indicating an increase in the output of those goods or services, less those imported. Meanwhile, state and local government investment and consumption expenditures grew at a 2.4% annual rate and added 0.25 points to the growth of 4th quarter GDP, as a real increase in state and local investment at a 6.7% annual rate accounted for 0.14 percentage points of that state and local addition to GDP…

December Personal Income Rose 0.3%, Personal Spending Rose 0.4%, PCE Price Index Rose 0.4%, Savings Rate at a 3 Year Low

Friday’s release of the December Income and Outlays report from the Bureau of Economic Analysis was concurrent with the GDP release, and all the PCE data in the 4th quarter GDP report we just covered originated from data developed for this report…and like that GDP report, all the dollar values reported here are at an annual rate and seasonally adjusted, ie, they tell us what personal income, spending and saving would be for a whole year if December’s adjusted income and spending were extrapolated over an entire year…however, the percentage changes are computed monthly, from one annualized figure to the next, and in this case of this month’s report they give us the percentage change in each annualized metric from November to December….

thus, when the opening line of the news release for this report tells us “Personal income increased $86.2 billion (0.3 percent at a monthly rate) in December,“ that means that the annualized figure for all types of personal income in December, $26,512.3 billion, was $86.3 billion, or more than 0.3% more than the annualized personal income figure of $26,426.1 billion for November; the actual increase in personal income in December over November is not given….similarly, disposable personal income, which is income after taxes, rose by more than 0.3%, from an annual rate of $23,112.9 billion in November to an annual rate of $23,188.6 billion in December…the monthly contributors to the change in personal income, which can be seen in the Full Release & Tables (PDF) for this release, are also annualized…in December, the major reasons for the $86.2 billion annual rate of increase in personal income were an annualized $38.4 billion increase in personal current transfer receipts from government programs, an annualized $24.3 billion increase in wages and salaries, an annualized $15.8 billion increase in proprietors’ income, and an annualized $3.3 billion increase in personal interest income…

Meanwhile, seasonally adjusted personal consumption expenditures (PCE) for December, which were used to compute the change in real PCE in the 4th quarter GDP report, rose at a $91.0 billion annual rate to a $21,474.9 billion pace of consumer spending annually, more than 0.4% above the personal spending in November, after November‘s PCE was revised from the previously reported annual rate of $21,409.7 billion to $21,383.9 billion, now up 0.4% from October…total personal outlays, which includes interest payments and personal transfer payments in addition to PCE, rose by an annualized $90.2 billion to $22,357.8 billion in December, which left personal savings, which is disposable personal income less total outlays, at a $830.8 billion annual rate in December, down from the revised $845.3 billion in annualized personal savings in November… as a result, the personal saving rate, which is personal savings as a percentage of disposable personal income, fell to 3.6% in December, down from 3.7% in November, and the lowest personal savings rate since November 2022…

While the output of goods and services implied by our personal consumption expenditures accounted for 69.2% of our fourth quarter GDP, before they could be used in that quarterly computation of the change in our output, they first needed to be adjusted for inflation, to give us the real change in consumption, and hence the real change in the goods and services that were produced for that consumption….. the BEA makes that adjustment by computing the price index for personal consumption expenditures, also included in this report, which is a chained price index based on 2017 prices = 100….from Table 5 in the pdf for this report, we find that the PCE price index rose from 128.149 in November to 128.605 in December, giving us a month over month inflation rate of 0.355836%, which the BEA reports as an increase of +0.4%…at the same time, Table 7 reports a rounded year over year PCE price index increase of 2.9%, and a core price increase, excluding food and energy, of 3.0% for the past year, both well above the Fed’s inflation target….applying the December inflation adjustment to the nominal change in December’s PCE shows that real PCE was up 0.069471% for the month, which BEA reports as a 0.1% increase in their summary table…note that when those PCE price indexes are applied to a given month’s annualized current dollar PCE, it yields that month’s annualized real PCE in chained 2017 dollars, which aren’t really dollar amounts at all, but merely the means that the BEA uses to compare one month’s or one quarter’s real goods and services produced to another….those quarterly results used to be shown in this report, but now they can only be found in table 3 of the current GDP report, where they were used to compute the contribution of real personal consumption of goods and services to GDP…

Trade Deficit Rose 32.9% in December After Rising 84.5% in November, But Was Down 0.2% for the Year

Our trade deficit rose 32.9% in December, after rising 84.5% in November, as the value of our exports decreased while the value of our imports increased….the Census report on our international trade in goods and services for December indicated that our seasonally adjusted goods and services trade deficit increased by $17.3 billion to $70.3 billion in December, from a revised November deficit of $53.0 billion, which was previously reported at $56.8 billion.…the value of our exports fell by a rounded $5.0 billion or 1.7% to $287.3 billion in December, on a $5.5 billion decrease to $180.8 billion in our exports of goods, which was partly offset by an $0.5 billion increase to $106.5 billion in our exports of services, while the value of our imports rose by a rounded $12.3 billion or 3.6% to $357.6 billion on an $10.2 billion increase to $280.2 billion in our imports of goods and a $2.0 billion increase to $77.4 billion in our imports of services…export prices were on average 0.3% higher in December, which means that the decrease in our real exports was roughly 0.3% greater than the nominal value increase, or that our real exports likely fell on the order of 2.0%, while import prices were 0.1% higher, meaning that the jump in the value of our imports was also mostly real, ie, not due to higher prices, and that our real imports probably rose by about 3.5%…

With this report, the seasonally adjusted goods data for January through November of 2025 were revised, which thus means that previously published quarter over quarter trade figures for GDP would need to be revised as well….however, except for the current quarter, that won’t be done until the GDP annual revision next September, which means that 4th quarter GDP is being computed by comparing revised 4th quarter trade data to unrevised 3rd quarter data… for all of 2024, the revised data indicated goods and services deficit was $901.5 billion, down $2.1 billion or 79.0% from the $903.5 billion deficit of 2024, as our 2025 exports were valued at $3,432.3 billion, up $199.8 billion from 2024, while our imports were valued at $4,110.0 billion, $4,333.8 billion, up $197.8 billion from 2024.

The press release for this month’s report gives us a brief synopsis of Exhibits 7 and 8 in the Full Release and Tables pdf for December, which details the major reasons for the decease in our exports and the increase in our imports:

Exports of goods decreased $5.5 billion to $180.8 billion in December. Exports of goods on a Census basis decreased $5.6 billion.

• Industrial supplies and materials decreased $8.7 billion.
  • Nonmonetary gold decreased $7.1 billion.
• Other goods decreased $1.3 billion.
• Capital goods increased $2.5 billion.
  • Semiconductors increased $0.9 billion.
• Consumer goods increased $1.8 billion.
  • Pharmaceutical preparations increased $1.3 billion.

Imports of goods increased $10.2 billion to $280.2 billion in December. Imports of goods on a Census basis increased $10.2 billion.

• Industrial supplies and materials increased $7.0 billion.
  • Nonmonetary gold increased $1.8 billion.
  • Copper increased $1.5 billion.
  • Crude oil increased $1.0 billion.
• Capital goods increased $5.6 billion.
  • Computer accessories increased $3.4 billion.
  • Telecommunications equipment increased $1.3 billion.
• Consumer goods decreased $3.5 billion.
  • Pharmaceutical preparations decreased $4.6 billion.

That press release for this month’s report also summarizes Exhibit 19 in the pdf, which gives us surplus and deficit details on our goods trade with selected countries…

The December figures show surpluses, in billions of dollars, with Netherlands ($5.6), South and Central America ($4.3), United Kingdom ($3.7), Hong Kong ($2.5), Brazil ($2.1), Belgium ($1.4), Singapore ($1.1), Saudi Arabia ($0.2), Australia ($0.2), and Switzerland ($0.1). Deficits were recorded, in billions of dollars, with Taiwan ($19.8), Vietnam ($17.6), Mexico ($14.5), China ($12.4), European Union ($11.1), Germany ($6.9), South Korea ($5.8), Japan ($5.3), India ($5.2), Canada ($4.9), Malaysia ($3.0), Italy ($2.5), France ($2.4), Ireland ($2.0), and Israel ($0.8).

• • The surplus with Switzerland decreased $8.0 billion to $0.1 billion in December. Exports decreased $6.9 billion to $4.4 billion and imports increased $1.1 billion to $4.3 billion.
• • The deficit with Taiwan increased $4.1 billion to $19.8 billion in December. Exports decreased $1.1 billion to $4.4 billion and imports increased $3.0 billion to $24.1 billion.
• • The deficit with Mexico decreased $3.3 billion to $14.5 billion in December. Exports increased $2.0 billion to $30.6 billion and imports decreased $1.3 billion to $45.1 billion.

Normally, the report on our international trade in goods and services for the third month of any quarter is released a week or more after the GDP report for that quarter, and we’d have to compare the figures in the two reports to estimate how the GDP report might have to be revised… however, with both this report and the GDP still running a month late in the wake of the October shutdown, this report was released on the day before the GDP report was and were available to the BEA for that advance GDP report we covered earlier..

Industrial Production Rose 0.7% in January, Boosted by Colder Weather

The Fed’s G17 release on Industrial production and Capacity Utilization reported that seasonally adjusted industrial production was 0.7% higher in January after the December change was revised from an increase of 0.4% to an increase of 0.2%, and after the November change was revised from an increase of 0.4% to an increase of 0.1%, which left industrial production 2.3% higher than a year earlier……the industrial production index, with the benchmark now set for average 2017 production to be equal to 100.0, rose to 102.3 in January from 101.6 in December, after the December index was revised from the 102.3 reported last month to 101.6, the November index was revised from 102.0 to 101.4, the October index was revised from 101.5 to 101.3, and the September index was revised from 101.8 to 101.7..

The manufacturing index, which accounts for around 77% of the total IP index, rose 0.6% in January, from 96.9 in December to 97.5 in January, on gains across almost all industry groups.…however, that increase came after the December manufacturing index was revised from 97.4 to 96.9, the November manufacturing index was revised from from 97.2 to 96.9, the October manufacturing index was revised from 96.9 to 96.6, and the September index was revised from from 97.5 to 97.4, leaving the manufacturing index 2.4% higher than a year ago…meanwhile, the mining index, which includes oil and gas well drilling, fell 0.2%, from 120.3 in December to 120.1 in January, after the December index was revised down from 121.9, which still left the mining index 2.5% above where it was a year earlier…lastly, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, rose 2.1% in January, from 111.5 in our cold December to 113.8 in our even colder January, after the December utility index was revised from 112.5 to 111.5 and the November utility index was revised from 109.7 to 108.2….even though last year’s heating requirements for January were also well above normal and left the utility index much higher at that time, this January’s utility index is now 1.1% higher than it was a year ago…

This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose to 76.2% in January from 75.7% in December, which was revised down from the 76.3% that was reported for December last month …capacity utilization of NAICS durable goods production facilities rose from a revised 75.1% in December to 75.5% in January, while capacity utilization for non-durables producers rose from a revised 76.9% to 77.1%…capacity utilization for the mining sector fell to 84.4% in January from 84.5% in December, which was originally reported as 85.7%, while utilities were operating at 72.9% of capacity during January, up from their 71.6% of capacity during December, which was previously reported at 72.3%…for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories….

December Durable Goods: New Orders Fell 1.4%, Shipments Rose 1.0%, Inventories Rose 0.2%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for December (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods fell for the second time in three months, decreasing by $4.6 billion or 1.4 percent to $319.6 billion in December, after the value of November’s new orders was revised from the $323.8 billion reported last month to $324.3 billion, now indicated to be 5.4% more than November’s new orders, revised from the 5.3% increase previously reported….for the entire year, 2025’s new orders were valued at $3,732,674 million, which was 7.8% above the $3,435,097 million value of 2024’s orders, after the value of 2024’s durable goods orders had fallen 1.5% from those of 2023….

The volatile monthly new orders for transportation equipment drove the December new orders decrease, as new transportation equipment orders fell $6.4 billion or 5.3 percent to $113.5 billion, on a 24.9% decrease to $26,656 million in the value of new orders for civilian aircraft, even as the value of new orders for motor vehicles and parts rose 1.2% to $67,981 million….excluding orders for transportation equipment, other new orders were 0.9% higher, while excluding just new orders for defense equipment, new orders fell 2.5%….at the same time, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, rose 0.6% to $78,998 million…

The seasonally adjusted value of December’s shipments of durable goods, which were included as inputs into various components of 4th quarter GDP after being adjusted for changes in prices, increased in value by $3.0 billion or 1.0 percent to $311.5 billion, the third increase in four months, after the value of December shipments was revised from from $308.7 billion to $308.5 billion, now down 0.3% from November….an increase in the value of shipments of transportation equipment led the December shipments increase, as they rose $1.5 billion or 1.5 percent to $102.4 billion, on a 5.1% increase in shipments of commercial aircraft and a 1.0% increase in shipments of motor vehicles and parts….excluding shipments of transportation equipment, other shipments were 0.7% higher, while the value of shipments of nondefense capital goods less aircraft rose 0.9% to $78,667 million, after the value of November’s shipments of capital goods was revised from $78,134 million to $77,984 million, now 0.2% higher than in October…

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the third consecutive month, increasing by $1.2 billion or 0.2 percent to $593.2 billion, after the value of November’s inventories was revised from $591.7 billion to $532,651 billion, still up 0.4% from October…a $0.4 billion or 0.4 percent increase to $104.1 billion in the value of inventories of machinery led the inventory increase, while the value of inventories of transportation equipment was 0.2% higher at $187,562 million, and the value of inventories of other than transportation equipment was also 0.2% higher at $405,660 million…

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but quite volatile monthly new orders, rose for the seventeenth of the last eighteen months, increasing by $13.2 billion or 0.9 percent to $1,527.2 billion…that increase followed a 1.4% increase to $1,514,039 million in November, which was previously reported as a 1.3% increase to $1,513.2 billion…an $11.0 billion or 1.2 percent increase to $960.6 billion in the value of unfilled orders for transportation equipment led the December unfilled orders increase, while the value of unfilled orders other than those for transportation equipment orders was 0.4% higher at $566,662 million…the unfilled order book for durable goods is still 10.3% above the level of last December, with unfilled orders for transportation equipment 16.0% above their year ago level, led by a 20.3% increase in the backlog of orders for commercial aircraft…

NB: for those who are interested in seeing graphs relating to this release, FRED at the St Louis Fed offers graphs of 445 different durable goods data sets…to change what is displayed on any graph, (ie, dollars, percent, etc) click the edit button and then click the edit line 1 tab and make your selection from the units menu…to change the displayed line graph into a bar graph, click the edit button and then click the format tab…

Housing Starts Reported 6.2% Higher in December; Permits 4.9% Higher

Note: In the wake of the shutdown disruptions to data collection, the report on new housing construction for December also incorporates new November figures, in an attempt to catch up..

The December report on New Residential Construction (pdf) from the Census Bureau estimated that the number of new housing units started in December was at a seasonally adjusted annual rate of 1,404,000, which was 6.2 percent (±10.7 percent)* above the preliminary November estimated annual rate of 1,322,000 housing units started, but was 7.3 percent (±14.0 percent)* below last December’s annual rate of 1,514,000 housing starts….the asterisks indicates that the Census does not have sufficient data to determine whether housing starts actually rose or fell from November to December, or even over the past year, with the figures in parenthesis the most likely range of the change indicated; in other words, December housing starts could have been down by 4.5% or up by as much as 16.9% from those of November, with revisions of a greater magnitude in either direction possible…in this report, the annual rate for October’s housing starts was revised from the 1,246,000 reported last month up to 1,272,000, while September’s starts, which were initially reported at a 1,415,000 annual rate, were revised down to a 1,328,000 annual rate with this report….

Those annual rates of starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that roughly 102,200 housing units were started in December, up from the 100,900 units that were started in November, but down from the 107,500 units that were started in October…of those housing units started in December, an estimated 69,400 were single family homes and 31,200 were units in structures with more than 5 units, up from the revised 71,000 single family starts in November, and up from the 218,700 units started in structures with more than 5 units in November…

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data….in December, Census estimated that new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,448,000, which was 4.3 percent above the preliminary November rate of 1,388,000 permits, but 2.2 percent below the rate of building permit issuance in December a year earlier…the annual rate for housing permits issued in October was revised to 1,411,000 from the originally reported 1,412,000….

Again, the annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected by canvassing census agents, which showed permits for 116,900 housing units were issued in December, up from the preliminary estimate of 94,100 new permits issued in November….the December permits included 63,600 permits for single family homes, up from 58,500 single family permits issued in November, and 49,300 permits for housing units in apartment buildings with 5 or more units, up from 31,700 such multifamily permits a month earlier…

New Home Sales Probably Lower in December on Higher Prices

Note: like the prior report, the December New Home Sales release also contains initial estimates for the month of November. Briefly, the Census report on New Residential Sales for December(pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 698,000 homes per year during the month, which was 1.7 percent (±14.5 percent)* below the November rate of 758,000, but 3.8 percent (±18.3 percent)* above the estimated 718,000 annual rate that new homes were selling at in December of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether December new home sales rose or fell from those of November, or even from those of December 2024, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….sales of new single family homes in October were revised from the annual rate of 737,000 reported last month to an annual rate of 656,000, while home sales in September, initially reported at an annual rate of 738,000, were revised to a 719,000 a year rate with this report…

The raw figures from estimates of canvassing Census field agents estimated that the median sales price of new houses sold in December was $414,400, up from the median sale price of $397,600 in November, but down from the median new home sales price of $423,000 in December a year ago, while the average December new home sales price was $532,600, up from the $530,200 average sales price in November, and up 4.1% from the average sales price of $508,900 in December a year ago….a seasonally adjusted estimate of 472,000 new single family houses remained for sale at the end of December, which represents a 7.6 month supply of homes at the December sales rate, down from the 7.7 months of new home supply estimated for November…

 

 

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)