Decoding Compliance

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month in review with most of the decline occurring after the $85 billion mandated budget cuts went into effect. The weekly average is the lowest since the week ending December 30, when the fiscal cliff debate tripped up consumer confidence. However, Gallup notes that economic confidence rebounded quickly following the end of the fiscal cliff debate and may similarly come back if Washington can successfully address the latest round of budget cuts. MARCH 13 Capital Economics: 'No Signs of Imminent Slowdown' in Housing Housing inventory is now at its lowest level since January 1994; home sales have exceeded listings for the past 25 months; and the upward trajectory in home prices starting at the end of last year continues, according to the latest U.S. Housing Market Monthly from Capital Economics. Home prices increased 9.7 percent yearover-year in January, continuing a recent trend, and prices show "no signs of an imminent slowdown," according to Capital Economics. Despite these increases, housing affordability remains high. As of December, the National Association of Realtors calculated affordability at 200, meaning a family earning a median-level income has double the amount needed to afford a median-priced home. MARCH 4 Home Improvement Sales Underscore Recovery Increased profits at home improvement outlets underscore Fitch Ratings' view that the housing recovery is in its early stages, the ratings agency said in a release. Pointing to solid 4Q12 results released by Home Depot (which saw a 4.6 percent rise in same-store sales last year) and Lowe's (which reported a 1.4 percent increase in same-store sales), Fitch projects the two home improvement giants will generate same-store sales growth of 2 to 4 percent, reflecting—in Fitch's view—"a slightly faster growth rate in sales channels serving professionals." MARCH 11 Layoffs Fall to Record Low in January The number of layoffs fell 4 percent to 1,507,000 in January, the Bureau of Labor Statistics (BLS) reported in its most recent monthly Job Openings and Labor Turnover Survey (JOLTS) release, which details the ins and outs of the labor market. The layoff total was the smallest since the JOLTS reports began in December 2000. At the same time, BLS said, the number of job openings rose 2.2 percent in January to 3,693,000, which meant there were 3.34 unemployed people for every job opening—a slight improvement from 3.38 in December. MARCH 6 Economic Confidence Dives as Sequestration Deadline Passes Gallup's Economic Confidence Index plummeted as Washington failed to navigate the thorny issue of sequestration before the March 1 deadline. The index fell to -22 for the week ending March 3 from -13 the week prior, Gallup reported, 16 | The M Report MARCH 1 Personal Income Plunges in January, Spending Up Reflecting the lending industry's fluctuating rate of recovery, the statistics that defined the economy in recent weeks displayed both promising highs and disconcerting lows. Personal income dropped $505.5 billion, or 3.6 percent, and disposable personal income (DPI) fell $491.4 billion, or 4 percent, in January, the Bureau of Economic Analysis (BEA) reported. The income drop was steeper than the 2.1 percent decline economists had expected. December's income had been artificially inflated by special corporate dividend payouts in anticipation of changes in individual income tax rates, which were tied into negotiations to avoid the fiscal cliff. At the same time, January's disposable income reflected the expiration of the two-year payroll tax holiday. The increase in spending was in line with economist forecasts.

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