Initial Claims: Prior 370k, Market Expects 375k, Actual 343k
Retail Sales +0.3%, ex auto 0.0, ex auto and gasoline +0.7
PPI +0.8% , ex food and energy is +0.1%, YoY +1.5%
Comments »PPI In South Africa Goes Unchanged at 5.2%
“South Africa’s producer-price inflation rate was unchanged in November, giving the Reserve Bank room to keep interest rates low to stimulate growth.
The cost of goods leaving factories and mines rose 5.2 percent in November from a year ago, Pretoria-based Statistics South Africa said on its website today. The median estimate of 12 economists surveyed by Bloomberg was 5.5 percent. Prices increased 0.3 percent in the month.
“The down-side surprise would feed into relief” for consumer prices, Carmen Nel, a Cape Town-based analyst at Rand Merchant Bank, said by phone. “Input cost pressures, significantly from the rand, seem to be largely absent.”
The Reserve Bank has held the benchmark repurchase rate at 5 percent since July. Consumer-price inflation was unchanged at 5.6 percent last month, the statistics agency said yesterday. The bank’s goal is to keep inflation within a range of 3 percent to 6 percent…”
Comments »FED: GDP Expected to Grow 2.3% to 3% for 2013, Rates Expected to Stay Low Until 2015
“A majority of Federal Reserve officials don’t expect to raise the main interest rate until 2015, when they forecast the jobless rate will fall to between 6 percent and 6.6 percent.
Federal Open Market Committee participants forecast today that gross domestic product will expand 2.3 percent to 3 percent next year, compared with 2.5 percent to 3 percent in September. Estimates for 2014 are from 3 percent to 3.5 percent, versus 3 percent to 3.8 percent in the previous projection, according to the central tendency forecasts, which exclude the three highest and three lowest of 19 projections.
The FOMC earlier today voted to supplement their $40 billion a month of mortgage-bond purchases with $45 billion in monthly Treasury purchases once their Operation Twist program expires at the end of the month. The Fed said interest rates will stay low “at least as long” as theunemployment rate remains above 6.5 percent and if inflation “between one and two years ahead” is projected to be no more than 2.5 percent.
The jobless rate probably will average 7.4 percent to 7.7 percent in the final three months of next year, officials said, versus 7.6 percent to 7.9 percent in September.
Five of 19 officials said the first interest-rate increase since 2006 would be warranted in 2014 or sooner, while 13 said it would occur in 2015. One called for an increase in 2016.
Officials said prices as measured by the personal consumption expenditures price index may rise 1.3 percent to 2 percent next year, versus an increase of 1.6 percent to 2 percent in September. Central bankers have set a 2 percent target for inflation.”
Comments »Eurozone Industrial Production Falls 1.4% in October
Analysis: More Pressure on Global Wages Could Backfire
“(Reuters) – If rising income gaps are at least partly responsible for the global credit crisis, governments and companies should be wary of squeezing wages yet again to help rebuild their finances.
In the long buildup to the global financial crisis, households took on debt to offset the gradual fall in their incomes and consumption relative to the more wealthy.
But as they’ll get little or no help from easy credit today, driving wages down even more risks a cratering of household consumption and a severe test of social cohesion.
A renewed public focus on decades of widening wealth and wage inequality in the United States, Britain and other developed and developing economies has been one of the most durable legacies of the five-year-old credit crisis.
Work by Nobel Laureate Joseph Stiglitz’ on the 1 percent of U.S. super-rich, “Occupy” protest movements around the world and electoral swings to the left have all spotlighted what business, finance or government elites now realize they can’t ignore.”
Comments »Housing to Boost U.S. Economy Next Year
“We are still waiting for a strong increase in construction employment, but we know it is coming (I expect construction employment will be revised up in the annual revision).
Michelle Meyer at Merrill Lynch wrote about this today (and more on housing): The housing market in 2013
We believe 2012 will go down in history as a year of transition for the housing market. Housing starts are on track to be up 25% and home prices are set to rise 5% over 2012. We believe the recovery will continue into 2013 for several reasons. Most importantly, household formation has started to turn higher, reflecting the shortfall of household creation over the prior five years. In addition, listed inventory is low, owing to extraordinarily slow construction and only a gradual reduction of the distressed pipeline. And specifically for prices, there has been a shift toward short sales as a means of disposing distressed properties. Moreover, investor demand is strong, particularly for distressed inventory.
We forecast housing starts to increase another 25% to an average of 975,000 and home prices to increase 3% in 2013.”
Comments »U.S. Import Prices Down 0.9% vs Expectations of 0.3%
YoY prices also decreased significantly.
This is good news for the Fed as they have no fear of inflation.
Comments »Industrial Production Rises in India, Case for Rate Cuts Decrease
“India’s industrial production grew at the fastest pace in more than a year in October and consumer- price inflation accelerated last month, reinforcing the case for the central bank to hold off on an interest-rate cut next week.
Output at factories, utilities and mines climbed 8.2 percent from a year earlier after a revised 0.7 percent decline in September, the Central Statistical Office said in a statement in New Delhitoday. The median of 34 estimates in a Bloomberg News survey was for a 5.1 percent gain. Consumer prices gained 9.9 percent in November from a year earlier, a report showed.
Prime Minister Manmohan Singh has opened the nation to more foreign investment in the past three months and stepped up efforts to pare a budget deficit to reinvigorate an economy beset by faltering domestic spending and exports. The government plans to announce measures to boost overseas sales this week after shipments fell for a seventh month in November, while theReserve Bank of India has signaled it may reduce interest rates next quarter if inflation eases.”
Comments »Machinery Orders Rise in Japan, Stimulus Still Expected to Push Economy Towards Growth
“Japan’s machinery orders rose for the first time in three months, a sign that companies may expect the world’s third largest economy to return to growth in 2013.
Orders, an indicator of capital spending, climbed 2.6 percent in October from the previous month, the Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg News was for a 3 percent increase. Large orders can cause volatile results.”
Comments »U.S. Trade Balance: Prior -$41.5 b, Market Expects -$42.8 b, Actual -$42.2 b
China’s Recovery Restricted by Less Than Expected Yuan Loan Sales
“China’s new yuan loans trailed forecasts last month, restraining the pace of recovery in the world’s second-biggest economy after a seven-quarter slowdown.
Banks extended 522.9 billion yuan ($84 billion) of local- currency loans, the People’s Bank of China said today. That compares with a 550 billion yuan median estimate in a Bloomberg Newssurvey of 30 economists and 562.2 billion yuan the same month last year. M2, the broadest measure of money supply, rose 13.9 percent from a year earlier, below the median estimate of 14.1 percent.”
Comments »Consumer Spending Begins to Weaken
“U.S. consumer spending, a rare pillar of economic strength in recent months, is showing signs of weakening.
American consumers helped carry the economy through a spring slowdown and appeared to power a summer resurgence in growth. But in recent weeks government data have shown spending was slower over the summer than previously believed, and it has started off the final three months of the year on an even weaker footing.
Now a range of factors, from high unemployment to the prospect of increased taxes due to the approaching “fiscal cliff,” are threatening to sap consumers’ spending power at a time when other sectors of the economy likely are too weak to pick up the slack.
President Barack Obama and House Speaker John Boehner met for one-on-one talks Sunday at the White House in a bid to hasten a resolution of the budget impasse, and the president’s aides have left his schedule largely open this week so he has the flexibility to hold more meetings and events. Neither side would discuss the content of Sunday’s conversation…..”
Comments »German Exports Unexpectedly Rose on Non-European Trade
“German exports unexpectedly rose in October as shipments to countries outside Europe offset weaker demand in the euro area.
Exports adjusted for work days and seasonal changes increased 0.3 percent from September, when they decreased 2.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 0.3 percent decline, according to the median of 14 estimates in aBloomberg News survey. Imports rose 2.5 percent from September.
While the German economy grew 0.2 percent in the third quarter, the euro area, Germany’s largest export market, succumbed to recession. Weaker demand from the 17-nation currency bloc will impact Germany, the Bundesbank said last week, predicting a contraction in the fourth quarter and stagnation in the first three months of 2013. Still, business confidence unexpectedly rose last month and factory orders, an indicator for future production, jumped 3.9 percent in October.
“The outlook may now be slowly improving with positive signals for Chinese and American growth, but the Eurozone recession is likely to continue to weigh on German exports,” saidChristian Schulz, an economist at Berenberg Bank in London. The rise in imports “does suggest resilience in domestic demand,” he said…”
Comments »China Economy Ticks Higher Into the “Sweet Spot” Honey Hole
As inflation hits 33 month lows China’s factory output and retail sales hit 8 month highs. Many analyst are calling for sustained upturn into the first half of 2013.
Comments »Millennials Are The New Demographic Consumers and They are Not Buying
I touched on this subject a month or so ago and it appears the consumer economy is in for real trouble….
Comments »Old Man Buffet’s Favorite Indicator Begins to Slow
“Rail traffic is taking a turn for the worse in recent weeks as the economy appears to be slowing even further into Q4. The latest reading on intermodal traffic came in at -1.1%. That brings the trailing 12 week average to 1.65%. The US economy appears to be just barely treading water at this point. This is also consistent with my latest update for Q4 GDP which is tracking at 1.1% (available via Orcam Investment Research).
Here’s more via the AAR: ”
Comments »Inflation Accelerates in Brazil for a Third Consecutive Month, Economists Baffled
“Brazil’s inflation accelerated in November for the third month, as prices rose more than all forecasts from economists surveyed by Bloomberg, limiting the central bank’s room to provide more stimulus for the struggling economy. Swap rates jumped.
Prices as measured by the benchmark IPCA index rose 0.6 percent in the month, the national statistics agency said today in Rio de Janeiro. The highest estimate from any of 39 economists surveyed was for a 0.56 percent rise, and the median call was for an increase of 0.5 percent. Annual inflation accelerated to 5.53 percent from 5.45 percent the previous month….”
Comments »U.K. Manufacturing Falls More Than Expected
“U.K. manufacturing production fell more than economists forecast in October as food and alcohol slumped, indicating weakness in the economy at the start of the fourth quarter.
Factory output dropped 1.3 percent from September, the most in four months, the Office for National Statistics said today in London. The median forecast of 28 economists in a Bloomberg News survey was for a 0.2 percent decline. Total industrial output unexpectedly fell 0.8 percent, a third consecutive decrease, led by mining, oil and gas….”
Comments »Australia’s Trade Deficit Widens Less Than Expected
“Australia’s trade deficit widened less than economists predicted in October as exports withstood a slower global economy and capital goods purchases increased.
Imports outpaced exports by A$2.09 billion ($2.2 billion), compared with a revised A$1.42 billion deficit in September, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 24 economists was for a deficit of A$2.2 billion.
Central bank Governor Glenn Stevens has reduced interest rates four times this year to 3 percent as prices of the nation’s biggest commodity exports ease. Policy makers are trying to revive demand outside of a resource boom that may crest in the first half of next year at a lower level than previously expected.”
Comments »South Korea’s GDP Grows Less Than Expected, Future Growth Revised Downward
“South Korea’s economy grew just 0.1 percent in the July-September period from the previous quarter,revised data showed on Thursday, a slight downgrade from an earlier estimate and the slowest in three and a half years.
Over a year earlier, Asia’s fourth-largest economy expanded by a revised 1.5 percent in the third quarter, the Bank of Korea said in a scheduled statement, also down slightly from its previous estimate and the worst in three years.
The central bank had previously estimated South Korea’s third-quarter growth at 0.2 percent on a quarterly basis and 1.6 percent on an annual basis.”
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