Global Business Confidence:

Businesses remain less than enthusiastic, but they are feeling much better than they were this summer. They feel pretty good about current business conditions: They are investing strongly in equipment and software and have even begun to hire a bit more in recent weeks. Businesses' expectations regarding the economy's prospects during the first half of next year have also taken on a brighter hue. Despite the improvement in business sentiment, it remains very fragile and consistent with an economy that is growing at the low end of its potential.

GDP: 1.81%
Growth in real GDP for the third quarter was revised down to 1.8% (SAAR) from the 2% reported last month. The downward revision was largely driven by a lower estimate of consumer spending, somewhat offset by an upward revision to inventory accumulation. Profits rose 1.7% (not annualized) in the third quarter, revised down from 2.1% reported last month. The downward revisions were disappointing, but economic growth has accelerated in the fourth quarter to help overcome drags coming in the new year.

Risk of Recession: -6%
The probability that the U.S. economy will be in recession in six months fell from 40% to 34% in November. An improvement in financial market conditions, a gain in consumer sentiment, and a drop in initial claims helped lower the odds of another recession. Though the economy is improving, a number of hurdles remain; Europe's debt situation remains unsettled and U.S. fiscal policymakers must extend the payroll tax holiday. All told, the economy is ending 2011 on a positive note; recent data put our tracking estimate for fourth quarter GDP growth above 4%.

 

Bloomberg Consumer Comfort Index: +4.9
The Bloomberg consumer comfort index moved up again, holding it above -50 for a second consecutive week. The index was up 4.9 points to -45 from -49.9 for the week ending December 18. The brightening of confidence was a result of gains in all three of the survey segments.

 

Conference Board Leading Indicators: +0.5%
The Conference Board index of leading indicators rose 0.5% in November, exceeding expectations, after rising 0.9% in October. Seven of the 10 components rose this month, compared with nine last month, with an increase in the interest rate spread component leading the way. The coincident index was 0.1% higher. The increase in the leading index is consistent with our expectations for a continued recovery in 2012.

 

ECRI Weekly Leading Index: -.1
The ECRI weekly leading index declined to 122.3 for the week ending December 9, from a revised 122.4. This decrease is in line with the fluctuations of the past few weeks and is indicative of the risks that the recovery faces. Continuing its upward movement, the rate of decline of the smoothed, annualized growth rate slowed to 7.5, affirming that the U.S. can further its recovery. 

 Consumer Price Index: 0.0%
Following the negative reading in the previous month, the consumer price index was unchanged in November, slightly above forecast but below consensus. The energy index declined sizably once again, taking all the steam out of overall consumer price inflation. The core CPI accelerated to a 0.2% pace, however, amid price increases in a broad range of categories. Some supply constraints in the economy are causing core CPI inflation to hold up, but a moderation is expected in the coming months.

State Personal Income: +0.1%
Consistent with the slowdown in the labor market during the third quarter, personal incomes rose 0.1% across the 50 states and the District of Columbia. The strike by Verizon workers and layoffs in the U.S. Postal Service and other federal government agencies slowed wage growth to 0.4%. The fastest income growth was in Washington state, where personal income was up 0.6% thanks to vesting stock options at tech companies. West Virginia performed worst-incomes fell there by 1.2%.
 

Jobless Claims: -4,000
Initial claims held on to recent improvements, edging even lower in mid-December. Although expectations were for a modest rise, jobless claims dipped by 4,000 to 364,000 for the week ending December 17; the prior week's data were revised from 366,000 to 368,000. The extension of falling jobless claims is an increasingly encouraging sign. Continuing claims fell in the prior week.

 

Mass Layoffs: down and up!
Mass layoff events decreased, but the number of employees affected increased in November from the previous month, roughly in line with mixed messages in more timely data showing elevated jobless claims but also faster net job growth over the month. The mixed movements highlight the anemic nature of the current labor market recovery. The number of layoffs involving at least 50 workers from a single establishment decreased to 1,331 in November. These layoffs involved 129,887 employees.

 

NAHB Housing Market Index:+ 2
The NAHB housing market index increased by 2 points to 21 in December from a revised 19 in November, beating expectations. All of the component indicators are exhibiting upward trends, with the present single-family sales indicator showing the most strength. Regionally, performance was mixed: The Northeast slipped, the Midwest held steady, the West gained, and the South surged.

 

New Residential Construction (C20): +9.3%
Residential construction jumped in November, with housing starts climbing 9.3% from the revised October number. This performance is better than anticipated: Even though the census revised downward October starts modestly, the November pace of 685,000 is higher than expected. Single-family starts increased 2.3% month to month to 447,000. Completions fell 5.6% in November compared with October and were down 1.6% compared with November 2010. Permit issuance is more positive, with a month-to-month gain of 5.7% and a year-to-year gain of 20.7%.

FHFA Purchase-Only House Price Index: -2.8%
The monthly FHFA purchase-only index declined by 0.2% from September to October, reversing much of September's downwardly revised gain. On a year-ago basis, the purchase-only index decreased 2.8%. The index decreased over the month in most regions of the country, but the New England division experienced the sharpest decline. In the context of somewhat stronger home sales between September and October, the decline suggests distress sales became a larger weight on selling prices early in the fourth quarter.

 

Chain Store Sales Snapshot: +3.4%
The ICSC chain store sales index surged in the latest week. The index jumped 3.4%, the largest weekly gain since late 2000. While gains have become typical late in the holiday season, year-over-year growth also jumped, to 4.6%, the biggest gain since early July. Weather was unseasonably warm in the week, which is typically a negative for sales at this point in the year. Gains were reportedly broad-based and helped reverse the weakness in recent weeks.

Natural Gas Storage Report: -100 bil cubic feet
Working gas in underground storage fell by 100 billion cubic feet during the week ending December 16, falling short of the consensus estimate a decline of 105 bcf. This report will cause natural gas prices to fall.

 

Source: Economy.com