Weekly Economic Update February 4, 2013

MORE HIRING … AND YET, MORE UNEMPLOYMENT

In January, the jobless rate ticked up to 7.9%. The Labor Department countered that with some good news: 127,000 more workers were hired across November and December than previously thought. Last month, 157,000 new jobs were created.1
EXAMINING CONSUMER BAROMETERS

According to the Commerce Department, personal spending rose
0.2% in December while personal incomes rose 2.6% (thanks in part to dividends
being issued ahead of the fiscal cliff). The savings rate hit 6.5%, a 43-month
high; after-tax incomes improved 2.8%. Elsewhere, while the Conference Board’s
January consumer confidence survey plunged 8.1 points to a 14-month low of
58.6, the University of Michigan’s final January consumer sentiment poll
improved 0.9 points to 73.8.2,3

GDP WANES; HOME PRICES, MANUFACTURING PERK UP

The economy contracted 0.1% in the past quarter, according to the initial estimate
of the Bureau of Labor Statistics. Analysts termed it an anomaly, with reduced defense
spending a big factor. The Institute for Supply Management’s January PMI showed
an impressive gain of 2.9% to 53.1. November’s Case-Shiller Home Price Index
revealed an overall 5.5% year-over-year improvement; the National Association
of Realtors reported a 4.3% decline in pending home sales in December.1,4,5

DOW ENDS WEEK AT 14,009.79
Friday’s close was within 200 points of the index’s 2007 peak. The Dow gained 0.82% last
week, while the NASDAQ advanced 0.93% (to 3,179.10) and the S&P 500 gained 0.68%
(to 1,513.17).6,7,8,9
THIS WEEK: Monday, data on December factory orders arrives plus earnings reports from Anadarko, Hartford
Financial, Clorox, Gannett, Humana, and Yum! Brands. Tuesday brings January’s
ISM service sector PMI and earnings results from Aflac, Allergan, Expedia,
Kellogg, Panera, Sirius XM, Estee Lauder, Toyota, Chipotle, Walt Disney and
Zynga. Wednesday offers earnings from Time Warner,
Akamai, Allstate, Cummins, CVS, Fifth Street, Green Mountain, Ralph Lauren, Marathon
Oil, News Corp., Prudential Financial, Tesoro, Visa, GlaxoSmithKline and Yelp. Thursday
brings the latest initial claims figures and results from Cigna, Coca-Cola,
Coinstar, Monster, Hasbro, Activision Blizzard, LinkedIn, Philip Morris,
Scripps Networks and Sprint Nextel. Friday, AOL announces Q4 results.

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Citations.

1 – www.businessweek.com/articles/2013-02-01/januarys-strong-jobs-report-trumps-a-decline-in-gdp
[2/1/13]

2 – www.bloomberg.com/news/2013-01-31/consumer-spending-in-u-s-climbed-in-december-as-incomes-surged.html
[1/31/13]

3 – www.bloomberg.com/news/2013-02-01/u-s-michigan-consumer-sentiment-increase-may-boost-spending.html
[2/1/13]

4 – www.ism.ws/ismreport/mfgrob.cfm
[2/1/13]

5 – briefing.com/investor/calendars/economic/2013/01/28-01
[2/1/13]

6 – money.cnn.com/data/markets/dow/
[2/1/13]

7 – money.cnn.com/data/markets/nasdaq/
[2/1/13]

8 – money.cnn.com/data/markets/sandp/
[2/1/13]

9 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F12&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F12&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F12&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F08&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F08&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F08&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F03&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F03&x=0&y=0
[2/1/13]

10 –
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F03&x=0&y=0
[2/1/13]

11 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldYear&year=2013
[2/1/13]

11 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[2/1/13]

12 – treasurydirect.gov/instit/annceresult/press/preanre/2003/ofm010803.pdf
[1/8/03]

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG  
DJIA +6.91 +10.17 +1.99 +7.40
NASDAQ +5.29 +11.62 +6.35 +14.07
S&P
500
+6.10 +14.28 +1.69 +7.68
REAL YIELD 2/1 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR
TIPS
-0.55% -0.28% 1.31% 2.34%

Sources: usatoday.com, bigcharts.com, treasury.gov,
treasurydirect.gov – 2/1/126,7,8,10,11,12

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.