Electrical Marketing's Leading Economic Indicators - January 2017

Purchasing Managers Index moves further into growth territory in December. The December PMI published monthly by the Institute for Supply Management (ISM) Manufacturing Business Survey Committee registered 54.7%, an increase of 1.5 percentage points from the November reading of 53.2%.

Building permits decline slightly in December. Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000, -0.2% below the revised November rate of 1,212,000, but +0.7% above the Dec. 2015 estimate of 1,201,000. Single-family authorizations in December were at a rate of 817,000, +4.7% above the revised November figure of 780,000. Authorizations of units in buildings with five units or more were at a rate of 355,000 in December. An estimated 1,186,900 housing units were authorized by building permits in 2016, 0.4% above the 2015 figure of 1,182,600.

Conference Board’s Leading Indicators continue their upward trend in November. The Conference Board Leading Economic Index (LEI) for the U.S. was unchanged in November, remaining at 124.6 (2010 = 100), following a 0.1% increase in October, and a 0.3% increase in September.“The U.S. Leading Economic Index continued on an upward trend through 2016, although at a moderate pace of growth,” Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, said in a press release.

“The underlying trends in the LEI suggest that the economy will continue expanding into the first half of 2017, but it’s unlikely to considerably accelerate. Although the industrial and construction indicators held the U.S. LEI back in November, the weakness was offset by improvements in the interest rate spread, initial unemployment insurance claims and stock prices.”

December’s oil rig count up over November but still down drastically year-over-year. The average U.S. rig count for December 2016 was 634, up 54 from the 580 counted in November 2016, and down 80 from the 714 counted in December 2015, according to Baker-Hughes. Texas’ Permian Basin showed the most year-over-year improvement, up 66 rigs to 268 rigs in Dec. 2016.