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Blueprint for Success
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January 10, 1:00 PM CT
Starting the year with JOBS

The job market finished 2016 on a strong note. During December, 156,000 jobs were added, bringing the total number of jobs gained in 2016 to 2.17 million. This was the sixth consecutive year the U.S. added over two million jobs. The unemployment rate edged up a tenth of a percentage point to 4.7 percent. The biggest job additions were in the health care and leisure sectors. The transportation and warehouse industries added more jobs than retail, reflecting the shift toward internet purchases versus in-store purchases. The bright spot in the report was wages. Earnings increased 2.9 percent from a year ago. Except for a small increase in October, annual earnings had the largest gain since 2009. Other promising signs in the labor market included a decrease in the U6, or the underemployment rate, to 9.2 percent and an increase in the labor participation rate to 62.7 percent.

Other Key Indicators this Week:

Manufacturing – The manufacturing industry closed out 2016 on a positive note. The Institute for Supply Management index increased to 54.7 percent, the strongest pace in two years. December was the fourth consecutive increase. All factors within the index improved. New orders increased 7.2 percent to the highest level since 2014. The increase in orders included the strongest pace of export orders since mid-2014 and provides a much-needed boost to factory activity. Employment at manufacturers also improved, while a gauge of production rose four points to the highest level since November 2014. Prices paid were up over 10 percent, the largest increase in five years.

Consumer Auto Sales – We love our cars! The auto industry chalked up another banner year for sales in 2016, with sales of 18.4 million units on a seasonally adjusted basis. This was the second record-breaking year in a row and the eighth year of increases. Even more stellar was the number of autos sold in December – 1.69 million, or 3.1 percent more than December 2015. The continued strong performance in auto sales is marred only by the growing rate of incentives used to garner sales. The average discount last month equaled 10 percent of the original asking price and was the highest incentive level seen before the financial crisis.

FOMC – The minutes from the December FOMC meeting revealed committee members' uncertainty about the proposed fiscal changes from the new presidential administration. About half the committee expects to see positive changes, while others are unsure what the outcome will be. Some members suggested the U.S. may be near full employment and foresee the need for future rate increases to counteract any inflationary pressures. Also of concern to the committee is how to communicate the path of future rate moves effectively.

Strategically for Credit Unions:

Note: We are going LIVE! There is still time to register, if you hurry. Take a minute now to register for the 2017 Blueprint for Success live stream broadcast on Tuesday, January 10 at 1 p.m. Central Time. This interactive economic outlook will focus on interest rates, credit risk and regulatory concerns. Participants will have the opportunity to ask questions and earn one CPE credit. If you are wondering how to handle the changes on tap in 2017, you won't want to miss this presentation.

Sarina Freedland – Senior Investment Officer

Although this information has been obtained from sources we believe to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. All herein listed securities are subject to availability and change in price. Past performance is not indicative of future results. Changes in any assumption may have a material effect on projected results.

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