Happy 250th America…Let’s Celebrate all year long!! The New York Fed’s Empire State Manufacturing Index expanding…While the most recent reading from the New York Fed’s Empire State Manufacturing Index edged down, it remains in expansionary territory. What does it mean – The Manufacturing continues to show that the economy is growing. Manufacturing jobs employment component returned to expansion and future expectations for employment jumped to a multiyear high. 
Stronger than expected nonfarm payrolls (NFP) report…Labor market is starting to show signs of new life while AI creates questions for many in the software industry. What does it mean – Despite some continued softness across data in January and recent layoffs in the AI and software space. The most recent ADP report shows that most of the hiring that took place in January was the result of small and mid-size businesses. Further proof that when government reduces regulations and gets out of the way the American entrepreneur rises to the challenge. Policy matters and the shift from the concentration in large businesses last year. Given that small and mid-sized businesses represent 46% of total employment, this represents a very healthy broadening of the economy. Despite last week’s jobless claims that rose by 22k, the largest weekly increase since the beginning of December and largest since 2020, private payrolls came in above expectations, and the unemployment rate fell to 4.3%. Even with the negative headlines, breadth in labor gains appear to be improving. CEO confidence rose sharply in Q1…Due to improved economic and industry outlooks and stronger capital spending plans. What does it mean – CEOs remained cautious on hiring and reported heightened concern over AI, geopolitical risks, and tariff-driven cost pressures but are taking their marching orders from the consumer, less regulation, and more relief to come from the Big Beautiful Bill. Homebuilder sentiment slipped to a five-month low…Affordability challenges and high construction costs continued to weigh on demand. What does it mean – Free handouts and cash from Covid front loaded the economy pushing forward tons of spending on everything imaginable. Home prices went up faster than at any time in history. The American dream is now realizing that all that free cash from COVID that caused record inflation has now come home to roost and it is our kids that will suffer the consequences of fear mongering from DC and the media. “Too big to fail” and the “chicken littles” of the world should be avoided at all costs. Personal income increased 0.3% month-over-month in December… Following an upwardly revised 0.4% increase (from 0.3%) in November. What does it mean – Along with wages and salaries increasing 0.2% month-over-month in December and increasing 0.5% in November. Americans are seeing their real income rising. Unfortunately, massive inflation during the last administration saw its purchasing power drop by 21% according to the Bureau of labor statistics. New home sales declined 1.7% month-over-month in December…This is a seasonally adjusted annual rate of 745,000 units versus 758,000 units in November.
