Publications

U.S. Economic Indicators

The National Association of Realtors pending home sales index edged down 0.7% in November (down 7.7% Y/Y), the eleventh straight month of annual decreases. NAR says that recent declines in mortgage rates are not yet reflected in the data, so Pending Home Sales may pick up in the near-term. NAR Report

U.S. News

The Wall Street Journal reports that consumer debt, which is on pace to exceed $4 trillion in 2019, does not yet seem to be an issue for Americans. Economists argue that moderate debt increases are a sign of a healthy economy, because consumers feel confident enough about the outlook for wages and employment to take on extra debt. WSJ

Kristina Peterson of the Wall Street Journal writes that the partial U.S. government shutdown appears likely to stretch into the new year. The Senate has adjourned until December 31st while the House appears unlikely to hold any votes until after Democrats take control of the chamber on January 3rd, which could further dampen the prospects of reaching a deal to fund the government. WSJ

U.S. Economic Indicators

Initial jobless claims fell 1,000 to 216,000 last week. The four-week moving average decreased 4,750 to 218,000. DOL Report

The Conference Board’s Consumer Confidence Index declined from 136.4 in November to 128.1 in December. The decrease was driven by a sharp decline in the Expectations Index.  Conference Board Report

U.S. News

Sharon Nunn of the Wall Street Journal writes that a protracted government shutdown could worsen an already-gloomy outlook for U.S. financial markets if business confidence begins to fade. Although both small and large business confidence remain healthy, an extended shutdown could worsen financial market volatility and dampen business confidence. WSJ

The Wall Street Journal reports that the natural gas glut in some parts of Texas and New Mexico has driven natural gas prices below zero in some cases. Energy companies operating in the Permian Basin are producing vast amounts of natural gas as a byproduct of oil drilling, but because they face substantial pipeline bottlenecks some firms have been forced to pay to get rid of their excess gas. WSJ

U.S. News

The Wall Street Journal reports that 2018 marked the strongest year for holiday retail sales in six years according to real-time spending data. Total U.S. retail sales rose 5.1% between November 1st and December 24th from a year earlier, suggesting that the recent, sharp stock market selloff and government shutdown had little impact on consumer behavior. WSJ

Jacob M. Schlesinger of the Wall Street Journal writes that U.S. farmers and ranchers are now worried that they will begin to lose market share in Japan as Japan prepares to ease tariffs and quotas for some of America’s biggest agricultural competitors. The move comes as the revised Trans-Pacific Partnership — a trade deal that the Trump administration left in January 2017 — takes effect, lowering barriers to trade for countries such as Canada, Australia, New Zealand, and Chile. WSJ

U.S. Economic Indicators

The third estimate of Q3 GDP indicates that the U.S. economy expanded at an annualized rate of 3.4%, slightly below the previous estimate of 3.5%. The reading reflects healthy consumer spending, government spending, and private inventories. BEA Report
 
The University of Michigan Consumer Sentiment Index rose 0.8 point to 98.3 in the final December reading, and is up 2.4 points on the year. The Index of Consumer Expectations edged down 1.1 points to 87.0, while the Current Economic Conditions Index rose 3.8 points to 116.1. Report

Real disposable personal income rose 0.2% in November while real personal consumption expenditures (PCE) increased 0.3%. The PCE price index inched up 0.1% (up 1.8% Y/Y) and the core price index edged up 0.1% (up 1.9% Y/Y). BEA Report

New orders of manufactured durable goods rose 0.8% in November after falling 4.3% (revised) in October, and are up 8.4% year to date.  Excluding transportation, new orders edged down 0.3% (up 7.3% YTD).  Census Bureau Report

U.S. News

Kate Davidson of the Wall Street Journal reports that Treasury Secretary Steven Mnuchin said that the market’s reaction to the Fed’s recent rate hike has been overblown and suggested rates may not need to be raised if inflation remains low. Mnuchin stated that markets were disappointed by Fed Chairman Jerome Powell’s comments that the Fed intends to raise interest rates twice next year and will continue shrinking its balance sheet. WSJ

U.S. Economic Indicators

Initial jobless claims rose 8,000 to 214,000 last week. The four-week moving average decreased 2,750 to 222,000.  DOL Report

The Conference Board’s Leading Economic Index edged up 0.2% to 111.8 in November. Of the ten indicators that comprise the index, seven contributed positively to growth in November. Conference Board Report

U.S. News

According to the Wall Street Journal, the Federal Reserve unanimously voted to raise short-term interest rates for the fourth time this year, but suggested that the pace of rate increases will slow next year. Fed Chairman Jerome Powell said officials expect the economy to be strong enough in 2019 to justify two more rate increases. WSJ

The Wall Street Journal reports that Saudi Arabia plans to cut oil output by more than it committed in a recent OPEC agreement, becoming one of two countries in OPEC to cut production by more than 100,000 barrels a day. Despite OPEC’s recent agreement to cut total production by 1.2 million barrels a day, oil prices have since fallen nearly 10%. WSJ