US 4Q GDP Held at 0.6% Growth

U.S. real GDP growth during last quarter was unrevised at a 0.6% annual rate. The Commerce Department figure was just slightly below the Consensus expectation for an upward revision to a 0.8% rise. The gain still was down sharply from an average rate of growth during the prior two quarters of 4.4%.

As expected, improvement in the foreign trade deficit added more to growth last quarter as imports are now shown to have declined at a 1.9% rate, rather than rise sharply. Export growth also was revised slower to 4.8%.

Half of the addition to GDP growth from trade was offset by more of a subtraction from inventory decumulation.

The remaining half of the revision stemmed from slower estimated growth in final sales to domestic purchasers. The decline in residential construction was deepened slightly to -25.2% (-18.6% y/y) and that pulled 1.3 percentage points out of GDP growth. Growth in business fixed investment also was revised slightly slower to a 6.9% rise. Growth in real personal consumption was held about steady at 1.9%.

Growth in the GDP chain price index was added to slightly to a 2.7% (AR) gain. The PCE price index rose at a 4.1% rate which was revised up very slightly. Less food & energy prices rose at the same 2.7% rate as initially estimated.

Monetary Policy Actions and Long-Run Inflation Expectations is from the Federal Reserve Board and it can be found here.

Initial claims for unemployment insurance rose a sharp 1,900 to 373,000 last week. During February claims have averaged 361,000, up 10.4% from the January average. The latest weekly level remained near the highest since October of 2005.

The four-week moving average of initial claims, a measure which smoothes out most of the series' w/w volatility, dipped slightly to 360,500 (+7.6% y/y).

A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

Continuing claims for unemployment insurance again rose sharply by 21,000 after a 49,000 increase during the prior week that was revised marginally higher. Insured unemployment stood at its highest level since Summer 2005. The figure provides some indication of workers' ability to find employment.

The continuing claims numbers lag the initial claims figures by one week.

The insured rate of unemployment remained at 2.1% for the fourth consecutive week.

The Conference Board reported that its index of help-wanted advertising dipped last month to a reading of 21, the record low plumbed in November.

During the last ten years there has been a 57% correlation between the level of help-wanted advertising and the three month change in non-farm payrolls.

The proportion of labor markets with rising want-ads fell to 41% from 59% in December. Both figures were improved from the low of 12% in August.

Most regions of the country showed the same, depressed readings of help wanted as December except the East South Central region where the index declined.

The Conference Board surveys help-wanted print advertising volume in 51 major newspapers across the country every month. The latest help wanted report from the Conference Board is available here.In 2006, the Conference Board introduced its Help Wanted Online Data Series and the latest release can be found in this link.

French household confidence is at an all time life-of-series low. Living standards for the past 12 months are rated as the worst of this 18-year period.Expected conditions over the next 12 months are rated in the bottom 3 percent of their range. Unemployment still is not widely expected and the expectations reading stands in the 43^rd percentile of its range. Price developments are in the top of their 18 range when assessed over the past 12 months but only in their 40^th percentile looking forward. The environment for spending is weak, in the 27^th percentile of its historic range. And the financial situation is sub par. The current financial situation is rated at the 47^th percentile of its range, a moderate step below the midpoint (50). But the past 12 months are rated in the bottom 9 percent of its range and the next 12 months are rated in the bottom 7 percent of its range. Clearly consumers are having a great difficulty and are unsure of the future and generally more pessimistic.