The U.S. merchandise deficit shrank and the service surplus rose, driving the overall deficit to the lowest level in three years. However, the rearranging of the supply chain by the Chinese manufacturers drove the deficit with Mexico and Vietnam higher.
The U.S. economy added jobs at a faster pace in January, and the jobless rate held steady. Job gains in November and December 2023 were revised higher by a combined 126,000.
New home sales rebounded in December and rose for all of 2023 as buyers struggled with affordability and elevated mortgage rates. However, average and median home prices declined in 2023 from the previous year.
Retail sales in December increased indicating resilient consumer spending. in the full-year 2023, food services and drinking places soared in double digits but furniture and home goods, garden supplies, and gasoline station sales declined.
December saw a rise in consumer price inflation, but core inflation painted a different picture. Over half of the increase in monthly inflation was driven by the rise in housing costs.
The U.S. trade deficit declined in November after service surplus rose more than exports. Exports and imports in the month declined, and the deficit with China and the European Union declined.
The number of job openings in November edged down, the number of hires decreased, and the number of separations fell as labor market conditions softened in the month.
The sale of newly built homes declined sharply after elevated mortgage rates and higher home prices raised affordability challenges. The decline in home sales was the steepest since April 2022.
Real gross domestic product growth accelerated in the third quarter from the second quarter after consumer and government spending, private inventory investment, and higher exports and imports. The growth was revised slightly lower after the third estimate.
Existing home sales expanded in November after falling for five consecutive months. Median home prices rose in the month, the fifth monthly price increase in a row.
