Fed Chair Janet Yellen said the central bank intends to reduce asset purchases at a “measured” pace, in testimony before the Senate last week. She also said in response to a separate question that the bond-buying program is likely to end in the fall. At the same time, “if there’s a significant change in the outlook, certainly we would be open to reconsidering,” Yellen said.
Payroll Forecast
Fed policy makers will likely keep a close eye on the labor market, where gains have been inconsistent over the past three months. Payrolls grew by 113,000 in January following advances of 75,000 in December and 274,000 in November. They’re projected to increase by about 150,000 in February, according to the median estimate of economists surveyed by Bloomberg before tomorrow’s Labor Department report.
Household debt increased at a 0.4 percent annualized rate last quarter, today’s Fed report showed. Mortgage borrowing dropped at a 1 percent pace. Other forms of consumer credit, including auto and student loans, increased at a 5.4 percent pace.
For all of 2013, household debt climbed 0.9 percent, the biggest gain since 2007, even as Americans continued to pay down home loans. Mortgage borrowing fell 0.8 percent, the smallest drop since 2008, which marked the first year of the recession.
Total non-financial debt increased at a 5.4 percent annual pace last quarter, the most in a year. Federal government obligations jumped by 11.6 percent, the biggest gain since the first three months of 2012. Business borrowing rose 7.1 percent. State and local government debt dropped at a 4.9 percent pace.