- The Federal Reserve reported that U.S. industrial production dropped 0.3 % in January, with a 0.8% drop in manufacturing output as “severe weather curtailed production in some regions of the country”.
- RealtyTrac, a firm that compiles housing data, reported that foreclosure filings unexpectedly increased 8% in January from December and Daren Blomquist, vice president at RealtyTrac said “the monthly increase in January foreclosure activity was somewhat expected after a holiday lull, but the sharp annual increases in some states shows that many states are not completely out of the woods when it comes to cleaning up the wreckage of the housing bust.”
- The Thomson Reuters/University of Michigan preliminary index of U.S. consumer confidence remained strong at 81.2.
- Federal Reserve Chief Janet Yellen’s comments to the U.S Congress included: On employment – while unemployment rate has fallen “the recovery in the labor market is far from complete….Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high.” On market volatility – “We have been watching closely the recent volatility in global financial markets. Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook.”
- In the Eurozone, the economy grew 0.3% during the fourth quarter of 2013, up from 0.1% during the third quarter.
- Regarding severe weather - January is often a slow month for businesses, as consumers focus on paying off holiday credit card debt. As residents in snow effected regions chant “die, winter, die”, snow removal businesses are experiencing strong demand for their services.
- Regarding foreclosures – hopefully the surprising increase is not the start of a trend. Regarding Yellens’ testimony - as she takes the reigns of the Federal Reserve, her approach and comments seem to be an extension of the Bernanke era.
- Regarding the Eurozone – this data suggests that the region many be moving beyond its recession stage.
- Bottom line – recent economic data is mixed but not ugly. However, the decline in U.S. industrial production combined with an increase in foreclosures may suggest that winter storms is not the only thing affecting the U.S. economy.