MetroIntelligence Economic Update by P. DUFFY
December service sector index drops 2.4 points to 59.9 percent, but still growing
In January, the Services PMI® registered 59.9 percent, 2.4 percentage points below December’s seasonally adjusted reading of 62.3 percent. Respondents continue to be impacted by coronavirus pandemic-related supply chain issues, including capacity constraints, demand-pull inflation, logistical challenges and labor shortages. Moreover, the COVID-19 omicron variant has disrupted operations, especially through reduced staffing levels. Despite these impediments, business activity and economic growth continue.
Labor productivity up 9.2 percent in 4Q2021 as economy rebounded sharply
Nonfarm business sector labor productivity increased 6.6 percent in the fourth quarter of 2021, as output increased 9.2 percent, hours worked increased 2.4 percent and hourly compensation rose 6.9 percent. From the fourth quarter of 2020 to the fourth quarter of 2021, productivity increased 2.0 percent as output rose 7.0 percent, hours worked rose 4.9 percent and hourly compensation rose 5.1 percent. Annual average productivity increased 1.9 percent from 2020 to 2021, with output rising 7.4 percent, hours worked up 5.4 percent and hourly compensation increasing 5.2 percent.
Purchase loan apps rise 4 percent from previous week, but down 7 percent year-on-year
The Market Composite Index for mortgage applications increased 12.0 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 4 percent (but down 7 percent year-on-year) and refinance activity rising 18 percent (but down 50 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages increased to 3.78 percent from 3.72 percent.