Expectations of gross domestic product growth
for the recently concluded first quarter had been coming down for weeks, but the release of those figures earlier this morning showed that growth was below even some of the more downbeat forecasts
. On point, the latest data showed that GDP rose by a scant 0.5% in the quarter
, two-tenths of a percentage point below the latest estimates. Earlier expectations, issued at the outset of the recent period, had growth coming in above 2%.
The Federal Reserve
, to the surprise of almost no one, has decided to leave interest rates unchanged, voting, by a 9-to-1 count, to keep the federal funds rate target at 0.25 to 0.50 percent. Fed Governor Esther L. George was the lone dissenter. She voted to lift borrowing costs by 25 basis points at the meeting.
, a broad gauge of factory, mining, and utilities activity across the country, fell rather sharply in March, declining 0.6% for the month
. Output has now fallen for six of the past seven months. All told, industrial production fell 2.2% during the first quarter. Expectations had been for a drop of just 0.1%. Moreover, results for February were revised downward to show a decline of 0.6%; initially, the February tally had fallen by 0.5%.
The Federal Reserve's Beige Book, a summary of economic conditions across the country, which is issued every six weeks and is used by the central bank in formulating economic policy, was released earlier this afternoon and it showed that national business activity was continuing to expand in late February and through March. In all, the pace of growth was varying across the 12 Federal Reserve Districts.
The Labor Department earlier this morning reported that the nation had added 215,000 new jobs last month. That was in line with expectations of 211,000 new positions. Also, results for January and February were revised just incrementally. On point, the January payroll number was reduced from 172,000 to 168,000; the February payroll gain went from 242,000 to 245,000. Thus, there was nothing in the raw numbers to excite or chagrin investors.
The Federal Reserve, which has been quite transparent in recent years, as it has generally telegraphed its intentions on interest-rate policy well in advance of the actual actions, did not surprise the pundits this time around. To wit, the overwhelming consensus had been right along that the mid-March FOMC meeting would conclude with no change in the target federal funds rate. And that is just what transpired.
The U.S. Commerce Department reported that privately-owned housing starts
had come in at a seasonally adjusted 1,178,000 annualized units in February
. That was up 5.2% from the revised January estimate of 1,120,000 homes started. The latest figure was the highest level
of new building since
. Also, just this morning, the Commerce Department has reported that industrial production fell
last month, edging downward by a seasonally adjusted 0.5% following a revised 0.8% surge in January. At the same time, the government reported that capacity utilization
by 0.4% in February, easing to 76.7%. It had averaged roughly 80% from 1972 through 2015.
The strong recovery on the employment front continued during February. In fact, job growth stepped up a notch, coming in well ahead of expectations. The companion unemployment rate was unchanged, as expected.
The Institute for Supply Management
, a trade group, reported that one of the more stable
surveys on the U.S. economy, its index on non-manufacturing activity
. And this report lived up to its reputation. Specifically, that group's survey registered a reading of 53.4 for February
, just one-tenth of a percentage point off of the January tally. This metric, which held securely above the dividing line (50.0) between an expanding and a contracting services sector, has now been rising for 79 consecutive months.
The U.S. Commerce Department, following the earlier release today of reasonably decent, but hardly overwhelming, metrics on both housing starts and building permits, has just issued data on industrial production and factory usage. These releases, by comparison, which were clearly supportive of further solid economic improvement.