2/23/21: EconUpdate by P. Duffy
EconUpdate by P. Duffy
Preliminary February economic output index rises to 58.8, indicating sharpest rise since March 2015
What does this mean? Although supply chain challenges and pent-up demand are fueling higher input costs, businesses are very bullish for 2021.
Adjusted for seasonal factors, the IHS Markit Flash U.S. Composite PMI Output Index posted 58.8 in February, up slightly from 58.7 in January. The upturn was the sharpest since March 2015. The Services Business Activity Index registered 58.9 in February, up from 58.3 in January. The Manufacturing Purchasing Managers’ Index slipped to 58.5, down slightly from 59.2 in January.
January Leading Economic Index rises another 0.5 percent as rebound continues
What does this mean? The Conference Board now expects the U.S. economy to expand by 4.4 percent in 2021, after a 3.5 percent contraction in 2020.
The Leading Economic Index (LEI) for the U.S. increased 0.5 percent in January to 110.3 (2016 = 100), following a 0.4 percent increase in December and a 0.9 percent increase in November. While the pace of increase in the U.S. LEI has slowed since mid-2020, January’s gains were broad-based and suggest economic growth should improve gradually over the first half of 2021.
Existing home sales edge up 0.6 percent in January, increase 23.7 percent year-on-year
What does this mean? With inventory at historic lows, buyers are snapping up listings almost as soon as they become available, pushing prices up 14 percent year-on-year.
Existing-home sales continued to increase in January to a seasonally-adjusted annual rate of 6.69 million, up 0.6% from the prior month and 23.7% from one year ago. Year-over-year, all four areas recorded double-digit gains in January. The median existing-home sales price rose to $303,900, 14.1% higher from one year ago. As of the end of January, housing inventory fell to a record-low of 1.04 million units, down by 25.7% year-over-year – a record decline with just 1.9 months of supply.
2020 e-commerce sales surged 32.4 percent from 2019
What does this mean? Pandemic-related shutdowns vastly accelerated the adoption of online shopping in 2020, with longer-term consequences for traditional retail stores.
Total e-commerce sales for 2020 were estimated at $791.7 billion, an increase of 32.4 percent from 2019 versus total retail sales rising just 3.4 percent year-on-year. E-commerce sales in 2020 accounted for 14.0 percent of total sales, up from 11.0 percent in 2019. E-commerce sales for the fourth quarter of 2020 alone were $206.7 billion, a decrease of 1.2 percent from the third quarter, but up 32.1 percent year-on-year.