US Service Sector Grew More Slowly in January
With a fall in the service sector, SPY and SPXL fell 4.9% and 7.1%, respectively, over the past month as of February 4, 2016.
New orders for factory goods fell $13.5 billion, or 2.9%, to $456.5 billion in December 2015, compared to a downwardly revised 0.7% fall in November 2015.
According to the Department of Labor, initial jobless claims stood at 285,000 for the week ended January 30. This was a rise of 8,000 from the prior week.
Nonfarm labor productivity fell at an annual rate of 3.0% during 4Q15, compared to a downwardly revised 2.1% rise in the previous period.
The US economy contributes about 25.4% toward global gross domestic product, and the manufacturing sector accounts for one-tenth of the country’s economy.
According to JPMorgan Chase and Markit, the global manufacturing PMI (purchasing managers’ index) rose slightly to 50.9 in January 2016.
Consumer spending accounts for about 70% of the GDP. Spending stayed lower in January. US consumers preferred saving over spending in December.
Personal income rose in December. The increase in non-farm proprietary income in December helped personal income increase at same rate as in November 2015.
The manufacturing sector accounts for about 12% of the US economy. The manufacturing PMI was 48.2 in January—a rise of 0.2 points from December.
The international trade gap in June 2015 widened due to the rise in petroleum imports and a decline in exports of industrial supplies and capital goods.
Looking at the condition of the labor market, we see that US consumption is affected by personal income and outlay, vehicle sales, consumer confidence, retail sales, and housing market activity.
US stock markets have been volatile for a very long time. A number of events since August 2015 have triggered even more volatility in markets around the world.
In the December quarter, employment costs in goods-producing industries rose 0.8% compared to 0.5% in September. It was mainly due to an increase in aircraft manufacturing employment costs.
The consumer sentiment final index fell to 92.0 in January 2016, from 92.6 in December 2015. That’s 1.3 points lower than the preliminary estimate of 93.3.
With a sharp increase in new orders and production, the Chicago business barometer, or the PMI (Purchasing Managers’ Index), rose 12.7 points to 55.6 in January 2016.
According to advance estimates of the Bureau of Economic Analysis, the US economy increased at an annual rate of 0.7% in 4Q15. GDP grew below the consensus estimate of 0.9%.
In December, new orders for manufactured durable goods fell by 12.0 billion, or 5.1%, to $225.4 billion.
Among the stocks at the bottom of the SPDR S&P 500 ETF (SPY) on January 27 were Total System Services (TSS), Apple (AAPL), and Red Hat (RHT).
Total System Services landed at the bottom of SPY after it reported earnings of $0.57 per share, compared to the company’s estimated EPS of $0.60.
The SPDR S&P 500 (SPY) and the Direxion Daily S&P500 Bull 3X both fell by 1.1% and 3.3%, respectively, on January 27, after the Fed’s decision not to hike.