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HARDWARE RETAILING | April 2017 20 Economic Metrics Definition Percentage Change Housing Starts (in thousands) 1 The per-month average number of new residential single-family and multifamily homes that have begun construction, using seasonally adjusted rates. Consumer Confidence 2 The level of optimism that consumers express about the state of the economy, shown through saving or spending money. Existing-Home Sales (in millions) 3 The number of completed sales involving single-family homes at an adjusted annual rate. Existing-Home Price (in thousands) 3 The average of the median prices for all existing housing types. Purchasing Managers' Index (PMI) 4 The health of the manufacturing sector based on measuring new orders, inven- tory levels, production, supplier deliver- ies and the employment environment. Trends Fourth Quarter Looks Good Across Industries All numbers are derived from October, November and December data. Source: U.S. Census Bureau 1 , The Conference Board 2 , National Association of Realtors 3 , Institute for Supply Management 4 The year 2016 ended on an economic upswing for the U.S., with housing, consumer confidence and the manufacturing sector all trending positively in the fourth quarter. The Purchasing Managers' Index is the only leading economic indicator included in this report, and its year-over-year growth means the manufacturing sector is still poised for growth. In the fourth quarter, manufacturers in many industries were expanding production to meet an increasing demand for products, according to the Institute for Supply Management, which conducts the study. Housing starts and consumer confidence both exhibited double-digit growth for the quarter. In addition, home prices went up, and existing home sales experienced an uptick. Existing-Home Sales (in millions) Existing-Home Sales At a seasonally adjusted rate. Q4 2015 Q4 2016 10% 11.7% 5.4% 9.7% 7.7% Manufacturing and Consumer Confidence Show Growth Months 5.6 5.2 1,249 1,135 107.2 96 $221 $233 53.3 48.6 2016 J F M A M J J A S O N D 4.0 4.5 5.0 5.5 6.0