January’s economic report wasn’t as positive as many professionals had hoped it would be. With declining house prices, rising jobless claims, and 2023 starting off with flattish U.S. stocks, it wasn’t all sunshine and glory for the United States of America’s economy.
Nonetheless, Kevin Canterbury of Arizona reports that the data collected from a variety of sources, including FactSet, First Trust, the U.S. Bureau of Economic Analysis, and the Wall Street Journal, provides investors with an overview of the state of affairs so far this year.
The December Chicago PMI Survey
The December Chicago PMI survey (otherwise known as the ISM Chicago Business Survey) rose by 7.7 points, reaching 44.9 — above the estimate of 40 points.
Despite breaking the streak of declining reports, the measure has stayed in contraction since September 2022, with November exhibiting the lowest reading since this financial crisis began.
Analysts believe the most recent score is due to the rise in both new and backlog orders alongside the falling inventories and employment.
The S&P/Case-Shiller Home Price Index Declines Again
The Case-Shiller home price index decreased by 0.8%; every city experienced a decline. However, the 20-city index still shows a gain of 8.6% year-over-year.
The Southeast dominated the per-city year-over-year gains, with Tampa and Miami up a whopping 20%, closely followed by Atlanta and Charlotte.
Seattle and San Francisco take the weakest cities status as they displayed minimal gains.
Pending Home Sales Decline
Home sales declined by 4% as 2022 came to an end, recording the second-lowest reading in the past two decades. Throughout the month, figures dropped across all four national regions, with the Northeast displaying the biggest decrease.
Nationally, the year-over-year value declined by a discouraging 38%, prompting analysts to cite rising interest rates as the main reason for the lackluster performance.
However, more recent interest rate decreases have sparked hope in investors, causing them to consider the possibility of a market rebound this spring.
As 2023 continues, experts note that the housing sector will continue to be a hyper-focused area, even though house transactions aren’t a large direct component of the country’s economic growth.
Initial Jobless Claims Are on the Rise
The week before Christmas 2022 saw new jobless claims rise by 9,000, totaling 225,000 — 5,000 more than the experts forecasted.
Continued claims from the previous week rose from 41,000 to 1.710 million, above the predicted 1.686 million.
The largest increases were experienced by Missouri, Kentucky, and New York, while Texas, Georgia, and California all saw a decline in jobless claims.
Beginning The Year with Flattish US Stocks
Even though U.S. stocks saw a brief flash of volatility as 2023 began, they ended flattish overall. However, this didn’t come as a shock to seasoned investors who always expect a low-volume trading week around the holidays.
Energy and financial sectors experienced market gains, while consumer staples and materials led decliners. Naturally, the high interest rates also saw real estate take a back seat as the calendar turned its last 2022 page.
The only ultra-positive returns (up over 60%) experienced were from the energy sector.
