3/2: METROINTELLIGENCE ECONOMIC UPDATE P.DUFFY

January construction spending flat from December but up 3.2 percent year-on-year

Construction spending was unexpectedly flat in January as a surge in investment in public construction projects was offset by a decline in private outlays. However, spending was up 3.2 percent year-on-year.

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Tax cuts and bonuses helped boost both January personal income and personal savings rate

Tax cut update:  In January, personal income rose 0.4 percent, disposable personal income (DPI) rose 0.9 percent (the biggest jump since 2015) and personal consumption expenditures (PCE) increased 0.2 percent, leading to an increase in the personal savings rate from 2.5 to 3.2 percent of income.

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Inflation update:  January PCE price index up 1.7 percent year-on-year

The PCE price index, favored by the Fed as a read on inflation, increased 0.4 percent in January and 1.7 year-on-year, still below its target of 2.0 percent. Excluding food and energy, the PCE price index increased 0.3 percent in January and 1.5 year-on-year.

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Bloomberg:  Weekly Consumer Comfort Index rebounds close to a 17-year high

The Consumer Comfort Index remained close to a 17-year high, rising from 56.2 to 56.6, on rosier views of personal finances and the buying climate, as workers enjoy more take-home pay after the recent tax-cut legislation.

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Mortgage applications rise 2.7 percent as rates remain flat at 4.64 percent

The Market Composite Index increased 2.7 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 6.0 percent but refinances falling 1.0 percent. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged from last week at 4.64 percent.

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Initial unemployment claims dip to lowest levels since December 1969

In the week ending February 24, initial unemployment claims were 210,000, a decrease of 10,000 from the previous week’s revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 5,000 from the previous week’s revised average. This is the lowest level for this average since December 27, 1969 when it was 219,750.

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