Friday Economic Snapshot: Feeling the January blahs

We’ve got a lot of indicators this week, with some interesting nuggets from the Federal Reserve Beige Book. Overall, optimism seems to have cooled, but maybe it’s the lingering effects of the Polar Vortex. Let’s get to it.

Small Business Optimism

The latest report from the National Federation of Independent Business (NFIB) showed that small-business optimism increased slightly in December. The stands at 93.9, 6 points below the pre-recession average. Also in the report, capital spending rose significantly in December and job creation among NFIB firms was the best it’s been since early 2006.

Zooming out back to the mid 1980s, the index remained around 100 until rising significantly in the early 2000s. The long dive started in 2004 and it bottomed out in early 2009

Unemployment

This week’s unemployment figures are also fairly blah — a decrease of 2,000 from the previous week. These numbers have been lackluster at best, and the latest data does little to assuage the fears of those worried about the lack of American job growth.

According to the Department of Labor, seasonally adjusted initial claims for the week ending January 11 was 326,000, down from the previous week’s 328,000. The 4-week moving average is now 335,000, which is a decrease of 13,500 from the previous week’s revised average of 348,500.

States looking particularly healthy: Michigan, New Jersey, Massachusetts, Ohio, Iowa, Pennsylvania, California and Maryland. States with the most unemployment claims: New York, Georgia, South Carolina, Alabama, Texas and Tennessee.

Beige Book

From the Federal Reserve, the Beige Book is a report published eight times a year that contains a lot of small, seemingly random stats that combine to paint a picture of the country’s overall economic health.

The latest Beige Book contains some interesting nuggets: nine of the Fed’s districts indicated moderate economic expansion (Atlanta, Chicago, Boston and Philadelphia districts); most reported increases in home sales, but Atlanta, Cleveland and Kansas City districts saw year-over-year sales growth slowing; Boston, Philadelphia, Minneapolis and Dallas reported home sales below year-earlier levels.

More: commercial real estate was general positive across the country, with most districts reporting increased commercial construction activity; manufacturing gains were centered in automotive and high-tech industries with many manufacturers expressing optimism about near-term growth; freight volume strengthened; tourism increased in most districts; many businesses are having difficulty finding qualified workers.

Takeaway

In summary, many signals of consumer confidence and overall economic optimism have become mixed. There’s a lot of talk of an approaching bear market in stock prices, and many Americans have reported feeling worse off financially than a year ago. It may just be the January blahs, but we’re seeing some headwinds to accompany many signs of fundamental strength in the economy.