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Consumption is up and the holiday season is underway! Now let us hope the markets follow suit…

Consumption Conundrum

Good news, 3rd quarter GDP was revised up to 2.1% from 1.5%. One of the reasons sighted was consumer spending increasing by 3.0%. Another major factor was inventory build-up, often times tied to anticipated consumer spending… Bad news, consumer spending for October only increased 0.1%[2].

Manufacturing

US Manufacturing expanded at a slower rate through November, 52.6 down from 53.9 in October. This would be a similar trend to last year, both years were marked by heavy inventory increases during previous quarters.

Home for Sale

New home sales increased dramatically, 10.7%, while existing home sales contracted 3.4%. In all, this does not signal a strengthening housing market as new homes sales represent a fraction of existing home sales. On the bright side, home prices through September grew 5.5% year over year[3].

Europe

The Euro continues to lose ground to the US dollar, approximately 12% year to date[4]. This has caused a strong rally in European equities. A weak Euro should translate to stronger exports and less imports.

Manufacturing and Services PMI data both beat expectation last week, coming in at 52.8 and 54.6 respectively. Each represent a 0.5 increase from last month[5].

Japan

$24 billion in stimulus was introduced focusing on eldercare, minimum wage, and childcare[6]. Their population has become increasingly senior. This is an effort to get able-bodied workers back into their decreasing workforce.

Conclusion

The coming weeks could be marked by swings as investors speculate on Federal Reserve actions. While consumption should be in focus, this Fridays jobs report may be very telling of actions coming mid-December.

 

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Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.

[1] © Jinyoung Lee | Dreamstime Stock Photos

[2] www.investing.com – economic calendar

[3] www.putnam.com – economic update

[4] www.troweprice.com – weekly market wrap-ups

[5] www.investing.com – economic calendar

[6] www.mfs.com – week in review

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