DJIA: 19,827.20 (-0.29%)
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Crude Oil: 53.15 (+1.49%)
The Consumer Price Index (CPI) has been rising steadily since July and increased 0.2% in December to raise the index for the previous 12 months to 2.1%. Price increases for 2016 were led by gasoline, shelter and medical care, with the cost of food at home and apparel declining. While the CPI does indicate inflation above the 2.0% target rate, the Federal Reserve uses the broader, business based Personal Consumption Expenditures (PCE) index, which typically lags the CPI. The December PCE report is due on Jan 30th.
The Federal Reserve’s Industrial Production report for December 2016 showed a 0.8% rebound from November’s downward revised -0.7% decline, and capacity utilization increased from 74.9% to 75.5%. A 6.6% rise in energy utilities, attributed to a return to more seasonable temperatures in December, accounted for much of the increase. Manufacturing was up by 0.2%, due mostly to an vehicle production led increase in durable manufacturing which outweighed declines in other manufacturing sectors. Overall, the index increased by 0.5% for 2016.
Housing Starts rose 11.3% in December to beat expectations at 1.23 million, with 2016 starts reaching their highest level since 2007. Rising rents and increasing prices for single family homes contributed to a 57.3% increase in the construction of multi-family housing units. Permits missed expectations as they fell 0.2% to 1.21 million, with permits for single family homes rising by 4.7% and multi-family housing falling by 9.0%.
Tuesday January 24 — Existing Home Sales
Friday January 27 — GDP