Last Week’s Economic News in Review November 16, 2016


Consumer credit saw solid growth, while wholesalers’ inventories grew, and layoffs remained at historic lows.

Consumer Credit

Consumer borrowing grew 6.3 percent in September, according to the Federal Reserve’s report from last week. Total consumer borrowing amounted to $3.7 trillion.

Growth was seen as relatively split between the two main types of consumer borrowing: revolving debt and non-revolving debt. Revolving debt, such as credit cards, grew at 5.2 percent in September to a total of $978.8 billion. Non-revolving debt, such as student or car loans, grew 6.7 percent to a total of $2.72 trillion.

“The consumer credit market is performing well, as more consumers are gaining access to loans and paying them off in a timely fashion,” said Nidhi Verma, senior director of research and consulting for the Financial Services Business Unit of TransUnion, told “We continue to see strong participation rates from the youngest consumer group, coupled with low delinquency levels — a promising sign for the industry.”

Wholesale Inventories

Total inventories for wholesalers, except manufacturers’ sales branches and offices, notched up to $590.2 billion in September, a 0.1 percent increase over August, the Census Bureau reported last week. That said, when compared annually, inventories fell 0.1 percent in comparison to September 2015’s total. Key drivers for September’s growth were inventories of nondurable goods, which grew 0.9 percent and inventories of petroleum and petroleum products, which gained 3.8 percent.

Wholesale inventories are an important indicator because they represent wholesalers’ outlook on demands from their retailer customers. Increased inventories indicate increased retail sales, which drive roughly 70 percent of the U.S. economy.

Sales for merchant wholesalers grew to $444.9 billion, up 0.2 percent from August’s total and were up 0.4 percent from September 2015’s sales. This put the inventories/sales ratio for merchant wholesalers at 1.33, which was unchanged from September 2015’s ratio of 1.33.

Initial Jobless Claims

First-time claims filed by the newly unemployed during the week ending November 5 plummeted to 254,000, a drop of 11,000 claims from the preceding week’s total of 265,000, the Employment and Training Administration reported last week.

The four-week moving average — considered the most stable measurement of initial jobless claims — ticked up to 259,750, a gain of 1,750 claims from the prior week’s average of 258,000.

This marked the 88th straight week of initial jobless claims coming in below 300,000, a threshold that economists consider an indicator of a growing job market. This is the longest such streak since 1970.

This week we can expect:
Tuesday — Retail sales for October and business inventories for September from the Census Bureau; import and export prices for October from the Census Bureau and the Bureau of Economic Analysis.
Wednesday — Producer price index for October from the Bureau of Labor Statistics; industrial product and capacity utilization for October from the Federal Reserve.
Thursday — Consumer price index for October from the Bureau of Labor Statistics; housing starts and building permits for October from the Census Bureau; initial jobless claims for last week from the Employment and Training Administration.


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