Publications

U.S. Economic Indicators

Existing home sales increased 1.9% to a seasonally adjusted annual rate of 5.32 million in November, but are 7.0% below year-ago levels.  NAR notes that despite home sales being down significantly from a year ago, home sales are stabilizing as rising inventory tames home price appreciation. NAR Report

U.S. News

Nick Timiraos reports for the Wall Street Journal that the Federal Reserve is preparing to raise short-term interest rates by 25 basis points Wednesday, the ninth increase since late 2015. While recent market volatility has raised doubts about whether the Fed will increase rates in December, recent economic data has been solid enough to support the move that officials have signaled for weeks. WSJ

According to the Wall Street Journal, borrowing costs for U.S. consumers have risen unevenly in recent months, as expectations of a December rate hike have been counteracted by an uncertain economic outlook. Consumer rates that closely track the federal funds rate have climbed since September, while longer-term lending rates have remained steady or fallen. WSJ

U.S. Economic Indicators

Privately-owned housing starts rose 3.2% in November to a seasonally adjusted annual rate of 1.26 million (down 3.6% year-over-year). Housing permits rose 5.0% to a 1.33 million annual pace in November and are up 0.4% on the year.  Census Bureau Report

U.S. News

The Wall Street Journal reports that due to low inflation and a slow recovery from the financial crisis, even small interest-rate changes from the Fed can have large effects on the economy.  The Fed has increased its benchmark short-term rate by slightly more than two percentage points since 2015, while during past recoveries it increased rates by more than four percentage points in the same amount of time. WSJ

Christopher Alessi reports for the Wall Street Journal that oil prices continue to fall from four-year highs reached in October and are at their lowest levels in over a year. Slipping global equity prices, concerns about global economic growth, and rising U.S. and Russian crude production have all contributed to the slide in oil prices. WSJ   

Jacob Bunge of the Wall Street Journal writes that the U.S. government will make a second, multibillion dollar payment to U.S. farmers struggling due to tariffs on soybeans, pork, and dairy products. Despite a new North American trade agreement and a trade truce with China, farmers continue to face low prices for their goods. WSJ

U.S. Economic Indicators

The December Empire State Manufacturing Survey indicated that industrial activity in the New York region grew at a much slower pace than in recent months, as the headline index plunged 12 points to 10.9.  The new orders index slipped down to 14.5, the shipments index fell to 21.0, and the index for number of employees rose to 26.1; meanwhile, hours worked remained steady.  NY Fed Report

The NAHB Housing Market Index fell 4.0 points to 56.0 in December and is now at its lowest point in over three years.  All the major components of the index posted declines this month as rising interest rates and home prices dampened demand. NAHB Report

U.S. News

The Wall Street Journal reports that the slowing European and Chinese economies have sparked worries that a slowdown could spread to the United States. While U.S. economic indicators remain steady, key business-activity indicators recently fell in China and Europe, dampening U.S. markets. WSJ

Christoph V Schon reports for the Financial Times that, despite the fact that every U.S. recession in the previous 60 years was preceded by a yield curve inversion, the timing of the next recession is harder to predict. The author cites historical evidence suggesting it can take between six months and two years for a recession arrive after an inversion of the yield curve. FT

U.S. Economic Indicators

Retail sales rose 0.2% in November and were up 4.2% on the year.  Core sales — which excludes autos, gasoline, building materials, and food services — increased 0.9%. Census Bureau Report
 
Business inventories were up 0.6% in October and were up 5.1% from last year.  Manufacturers’ sales edged down 0.1% but were up 8.3% on the year. Census Bureau Report
 
Industrial production rose 0.6% in November (up 3.9% Y/Y), after decreasing 0.2% (revised) in October.  Capacity utilization edged up 0.4 point to 78.5 in November.  Fed Report

U.S. News

A survey from the Wall Street Journal finds that most economists view a trade war between the U.S. and China as the biggest economic threat in 2019. Economists also identified financial market disruptions and a slowdown in business investment as concerns for next year. WSJ

Tom Hancock at the Financial Times reports that China will reduce tariffs on imported automobiles from the U.S. for three months starting January 1. China will cut tariffs on American-made cars from 40 to 15 percent in accordance with the agreement reached between Xi Jinping and Donald Trump in Argentina. FT

U.S. Economic Indicators

Initial jobless claims fell 27,000 to 206,000 last week. The four-week moving average decreased 3,750 to 224,750.  DOL Report

U.S. News

The Wall Street Journal reports that commodities prices will end the year with declines, with oil falling 15% and lumber 28% in 2018. These price declines are driven by growth fears, trade tensions, and a strong dollar. WSJ

According to the Financial Times, Chinese companies have resumed importing U.S. soybeans for the first time in months. Soybeans, one of the largest U.S. exports to China before the beginning of the current trade conflict, were targeted with tariffs that had caused shipments to fall to nearly zero. FT

Kate Davidson of the Wall Street Journal writes that in a new survey economists have scaled back their forecasts for interest-rate hikes in 2019. While almost every economist surveyed expects a rate increase in December of this year, the median forecast for 2019 was two total rate hikes, down from expectations of three just last month. WSJ