The Monday Morning Quarterback /A quick analysis of important economic data released over the last week
Elliott D. Pollack & Co.
With the short workweek, this will be an abbreviated version of the MMQ. But, there was still considerable good economic news. Growth was strong, consumer confidence is still in a positive trend, corporate profits were up, and OPEC could not stop the decline in oil prices that will add billions to consumers’ pockets. This is all good news going into the holiday shopping season.
Arizona Snapshot
The S&P/Case-Shiller home price index for Greater Phoenix was down 0.1% in September vs. August. It was still up 3.0% from a year ago.
U.S. Snapshot
The economy expanded at its fastest pace in more than a decade during the spring and summer despite increasing global uncertainty. Real GDP grew at a seasonally adjusted annual rate of 3.9% in the third quarter. Previously, third quarter growth was estimated at 3.5%. Expectations were for a slower 3.3% pace.
Corporate profits increased 2.1% in the third quarter and now stand 0.4% above a year ago.
The consumer sector continues to nudge upward in both income and spending. Personal income grew 0.2% in October after advancing 0.2% in September. Disposable personal income (DPI) also increased by 0.2% and now stands 3.9% above a year ago. Personal consumption expenditures grew by 0.2% and are 3.6% above a year ago.
The personal savings rate in October was 5.0%. This is the same rate as September. The savings rate was 4.7% in October 2013.
The two major measures of consumer confidence were mixed. The Conference Board index, shown in the chart below, was down in November from October (88.7 vs. 94.1). But, it was still up substantially from a year ago (72.0). On the other hand, the University of Michigan index was up in November to 88.8 compared to 86.9 in October and 75.1 a year ago. Overall, things appear to be moving in the right direction for the consumer.
In October, the headline number for durables looked good, but, the core number was disappointing. The core fell 0.9% in October after a rise of 0.2% in September. Expectations were for a 0.5% gain in October.
New home sales were soft in October, but, sellers were getting their prices. New home sales come in at a lower than expected 458,000 pace vs. 455,000 in September. This series is very volatile and is subject to significant revision.
The S&P/Case-Shiller home price index was flat from August to September after a 0.2% gain in August vs. July. The 20 city index was up 4.9% compared to a year ago in September.
