Monthly Archives: December 2012

Fiscal Cliff Update

My political handicapping friends tell me that a deal is likely to be delayed now, for a bigger deal in a month. Congress can pass a continuing resolution (funding bill) as late as December 31, likely the 30th. This would buy time to negotiate a larger deal including long-term deficit reduction and corporate tax reform. [...]

Spending Rebounds after Sandy; Durable Goods Orders Firm

Personal incomes and spending both rebounded in November, as consumers took advantage of holiday promotions and caught up on spending postponed during Superstorm Sandy, which hit the Northeast at the end of October and was followed by another big storm. Cleanup and replacement efforts have begun in some, but not all, of the worst affected [...]

Home Sales Rebound after Sandy

Existing home sales rose to a 5.04 million-unit, annualized rate in November after being revised down on Sandy-related losses in October. Gains were broad-based and occurred in all regions. Co-op and condo sales, which had been weaker than single family home sales, showed particular strength. That is likely due to the bounce-back in demand in [...]

GDP for Q3 Revised up on Consumer Spending, Residential Investment

Real GDP was revised up in the third quarter to 3.1%, almost half of one percent higher than the second cut of the data last month. There was a little more positive news in the data, with upward revisions to consumer spending and residential investment revealing a slightly stronger consumer and more importantly, housing market. [...]

Housing Starts Drop on Sandy Disruptions

Housing starts fell to an 861,000 unit annualized pace in November, as the effects of the two storms that hit the East Coast – Sandy and the Nor’easter – continued to disrupt construction activity.  Many construction projects were temporarily sidelined because workers were initially focused on cleanup efforts and restoring electricity. Almost all of the [...]

Fed Sees Sandy Effects in IP Report

Industrial production rebounded 1.1% in November after dropping 0.7% the previous month. The Federal Reserve, which tracks industrial production, reported that much of the rebound may be attributed to a snapback in industries affected by Superstorm Sandy. They also reported an outsized gain in vehicle production, the demand for which was boosted by damages to [...]

CPI Moderate on Energy Prices

The Consumer Price Index (CPI) fell 0.3% in response to falling energy prices. Gasoline prices dropped 7.4% in November, despite shortages on the East Coast in the wake of Superstorm Sandy. Again, the government and state agencies report that it is difficult to see effects associated with Sandy. It is notable, however, that emergency authorities [...]

Retail Sales Mixed on Sandy Disruptions; PPI Down on Energy

In November, retail sales increased 0.3% for the month, but were flat excluding auto sales. The Commerce Department reported that it was difficult to separate out the effects of Superstorm Sandy, as some stores were closed and even shut permanently by the storm, while others saw a surge in storm-related business. The composition of sales, [...]

Chicago’s Evans Rules the December Fed Meeting

As we expected, the Federal Open Market Committee (FOMC) continued its open-ended commitment to purchase new, mortgage-backed securities at $40 billion per month and initially replace “Operation “Twist” with a program to purchase long-term bonds at a pace of $45 billion per month. In addition, the Federal Reserve will continue to replace any maturing, mortgage-backed [...]

Employment Report not as Good as it Appears

Nonfarm payroll employment increased by 146,000 in November, almost double the expectations given disruptions created by Superstorm Sandy. The Labor Department says that Sandy had very little impact. Other employment reports for the month, however, suggest that it did. The ADP jobs report showed a loss of 86,000 jobs to Sandy, while claims for unemployment [...]