Economic Release Snapshot: Business Confidence Drops

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

Reports for the Week of January 3

ISM Manufacturing, December (Wednesday)

• Expected/prior ISM Manufacturing index: 48.5/49.0
• Actual ISM Manufacturing index: 48.4

Manufacturer confidence declined slightly more than expected in December, as slowing global demand for manufactured goods led to fewer orders and a slowdown in manufacturing activity.

FOMC meeting minutes, December (Wednesday)

The Fed’s December meeting minutes showed that many central bankers remain concerned about inflation despite the recent declines we’ve seen in year-over-year price growth. The Fed is expected to keep monetary policy tight through the start of the year.

International trade report, November (Thursday)

• Expected/prior trade deficit: –$63.0 billion/–$77.8 billion
• Actual trade deficit: –$61.5 billion

The trade deficit narrowed by more than expected in November, driven by a 6.4 percent drop in imports and a 2 percent decline in exports. The drop included a sharp decline in auto and consumer goods imports, signaling slowing consumer demand for foreign goods.

Employment report, December (Friday)

• Expected/prior monthly job growth: 203,000/256,000
• Actual monthly job growth: 223,000
• Expected/prior unemployment rate: 3.7%/3.6%
• Actual unemployment rate: 3.5%

The labor market remained strong at the end of the year, and 223,000 jobs were added in December, which beat expectations. The unemployment rate also declined more than expected during the month, hitting the post-pandemic low of 3.5 percent.

ISM Services, December (Friday)

• Expected/prior ISM Manufacturing index: 55.0/56.5
• Actual ISM Manufacturing index: 49.6

Service sector confidence fell far more than expected in December, bringing the index into contractionary territory to end the year. The major driver of the larger-than-expected decline was a slump in new orders during the month; however, severe winter weather may have also played a role in the drop.

Upcoming Reports for the Week of January 9

Consumer Price Index, December (Thursday)

Headline consumer prices are set to remain unchanged in December while core prices are expected to increase modestly. Both headline and core consumer inflation are set to slow on a year-over-year basis.

University of Michigan consumer sentiment, January preliminary (Friday)

Consumer sentiment is expected to increase modestly during the month, which would mark two consecutive months of improving confidence.