There was a significant amount of economic data released today in advance of the Christmas holiday. There were no major surprises with 3 data points missing consensus, 2 came in at consensus and 1 exceeded consensus. The 3 missed were by a slim margin. The markets are mostly flat on the news.
At this year's annual Robin Hood conference, which was held virtually, the founder of the world's largest hedge fund, Ray Dalio, talked about asset bubbles and how investors could detect as well as deal with bubbles in the marketplace. Q1 2021 hedge fund letters, conferences and more Dalio believes that by studying past market cycles Read More
Typically headlines focus on year-over-year (Y/Y) and (or) month-over-month (M/M) changes. While this is an important view I also like to consider the absolute level. I will do so in the following charts.
New orders for durable goods showed a decline in the M/M reading of -1.3% with the Y/Y increase coming in at 9.4%. The consensus was for a -1.0% M/M decline. Excluding the volatile transportation component order were up 2.4% and 10.6% M/M and Y/Y respectively. Despite the impressive rebound in orders from the early 2009 lows the absolute level of orders is at mid-2000 levels.
Personal Income and Outlays
Personal income was up .3% in November after a .5% rise in October. Y/Y change is 3.8% and personal income remains its upward climb that began in December 2009. Consumer spending was up .4% versus a .5% consensus and the core PCE price index was up .1%, in-line with consensus.
Initial Jobless Claims
Initial jobless claims came in at 420k for the week ending Dec 18th, in-line with both prior month and consensus. The 4 week moving average rose to 426k.
Consumer sentiment improved to 74.5 for mid-month December. This is up from 71.6 in November but as can be seen overall sentiment remains at historically low levels.
New Home Sales
New homes sales were 290k in November up from 283k in October. The November consensus was 300k. The number of new homes for sale decline to 197k from 201k last month but months of inventory remain very high at 8.2 months.