On Thursday February 18, 2010, 4:46 pm
WASHINGTON (Reuters) - The Federal Reserve said on Thursday it was raising the interest rate it charges banks for emergency loans, citing improvement in financial market conditions.
The Fed said the discount rate would be increased to 0.75 percent from 0.50 percent, effective Friday.
"Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities," the Fed said in a statement.
"The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy," it said.
Released on 12/1/2009 10:00:00 AM For October, 2009
Prior Actual
Pending Home Sales Index - Level 110.1 114.1
Pending Home Sales Index - M/M 6.1 % 3.7 %
Highlights
Existing home sales got a giant boost in October from the pending expiration of the first round of buyer credits, a gain that raised questions whether sales rates were pulled forward and would dip in subsequent months. But today's pending home sales report points to continued strength ahead. Pending home sales jumped 3.7 percent in October to 114.1, adding to September's even more impressive 6.0 percent gain. Year-on-year pending home sales are up 31.8 percent. The housing sector appears to be moving off the bottom, underscored by the 4.4 percent rise in private residential construction also reported today at 10:00.
Released on 12/1/2009 10:00:00 AM For October, 2009
Prior Consensus Consensus Range Actual
Construction Spending - M/M change 0.8 % -0.4 % -1.5 % to 0.3 % 0.0 %
Market Consensus Before Announcement
Construction spending was sharply higher than expected for September but a large downward revision to August was essentially offsetting. Overall construction spending advanced 0.8 percent in September after slipping a downwardly revised 0.1 percent in August. The decrease in August was now significantly lower than the original estimate of a 0.8 percent gain. The boost in spending in September was led by a 3.8 percent surge in private residential outlays. Private nonresidential declined 1.8 percent and public outlays decreased 0.1 percent in the latest month.
Released on 12/1/2009 10:00:00 AM For November, 2009
Prior Consensus Consensus Range Actual
ISM Mfg Index - Level 55.7 55.0 53.8 to 56.0 53.6
Market Consensus Before Announcement
The composite index from the ISM manufacturing survey jumped more than 3 points in October to 55.7. This is the strongest for this index in more than three years. Showing the most improvement of the composite's components was the production index which advanced over 7-1/2 points to 63.3. But we may see some leveling off in the composite index in November as the new orders index eased from 60.8 in September to 58.5 in October, but still remained well in positive territory. Price increases were steady in the month, showing little change at 65.0 compared to 63.5 in September.
Released on 12/1/2009 8:55:00 AM For wk11/28, 2009
Prior Actual
Store Sales Y/Y change 2.8 % 3.8 %
Highlights
Redbook reports strong results for the Nov. 28 shopping week, with gains driven by strong electronics sales and aggressive markdowns across categories. Redbook's year-on-year tally in the week is plus 3.8 percent, up 1 full percentage point from the prior week for, by far, the strongest rate of the year. Month-to-month, Redbook projects an exceptionally strong 5.2 percent rise vs. October. If there is one negative, it's that deep markdowns will be hurting bottom lines. There was no reaction to the results, at least initially. Chain stores will post their own company data on Thursday.
Released on 12/1/2009 7:45:00 AM For wk11/28, 2009
Prior Actual
Store Sales - W/W change 0 % -0.1 %
Store Sales - Y/Y 3.3 % 3.1 %
Highlights
ICSC-Goldman reports only mild results for the big Nov. 28 shopping week, down 0.1 percent vs. the prior week for a year-on-year rate of plus 3.1 percent, a rate that's down 2 tenths from the prior week but, benefiting from an easy comparison, still the second best rate of the year. The report said consumers pushed back their holiday shopping, a negative for November but a plus for December. Redbook will be posted at 8:55 a.m. ET.
Starting tomorrow, Goldman Sachs employees aren’t allowed to gather in groups of 12 or more outside the office.
Goldman [GS 169.66 5.50 (+3.35%) ], if you recall, canceled its holiday party for a second year in a row — banker soirees being seen as somewhat bad form at time when it seems everybody else is standing in the unemployment line.
But, those crafty bankers found a way around the party prohibition: They started organizing small "dinners," often paid for by executives.
Determined to uphold its image of doing “God’s work,” as Lloyd Blankfein puts it, Goldman cracked the Christmas whip, sending a voicemail to employees a few weeks ago, instructing them to have no more private parties.
The ban, in place for the month of December, prohibits employees from gathering in groups of 12 or more, Business Insider reports.
So, 10 lords a leaping, nine ladies dancing=totally OK. But if you see 12 bankers — they'd better be banking!
No word on what the punishment is for excessive festiveness.
Released on 11/30/2009 9:45:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Business Barometer Index - Level 54.2 53.0 50.8 to 55.5 56.1
Highlights
Gains in new orders and a slowing in deliveries hightlight November's Chicago purchasers' report, offsetting further losses in employment and further draws in inventories. Chicgao's headline index rose nearly 2 points to 56.1 to indicate a month-to-month increase in the pace of overalll business activity in the area. New orders rose 1.4 points to a very strong 62.8, a plus-60 level that, because of its strength, will be hard to match in the coming months. Supplier deliveries rose 6.7 points to 57.4 to indicate a significant slowing in deliveries and congestion in the supply chain. Production, at 56.1, rose in the month but at a slower pace than October's very strong 63.9. Employment, at 41.9, indicates substantial month-to-month contraction but at a less severe pace than October's 38.3 level. Prices paid showed a mild month-to-month increase at 52.6, a result that raises no concern.
The report is a mild plus for the economic outlook especially the gain in new orders which points to strength in production and hopefully employment in the months ahead. Markets showed no reaction to the results. The ISM, which samples purchasers on a national scale, will post its reports this week with Tuesday set for the manufacturing report and Thursday for non-manufacturing. Note the Chicago report, which has no connection with the ISM, includes both manufacturers and non-manufacturers in its sample.
Market Consensus Before Announcement
The Chicago PMI jumped more than 8 points in October to 54.2. For the month, production surged nearly 17 points. We may see further improvement in November as the new orders index jumped more than 15 points.
Released on 11/25/2009 10:00:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Home Sales - Level - SAAR 402 K 410 K 385 K to 425 K 430 K
Market Consensus Before Announcement
New home sales in September fell 3.6 percent to a much lower-than-expected annual rate of 402,000. Supply on the market was steady and still elevated with months' unchanged at 7.5 months. However, it was a notable improvement from earlier in the year and especially against the year-ago level of 10.9 months. Apparently, the likely reason that existing home sales did well in September but not new home sales is that homebuilders were trying to keep sales prices up while those in existing home have been more willing on price concessions. The median price of new homes rose 2.5 percent in the latest month to $204,800.
Released on 11/25/2009 9:55:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Sentiment Index - Level 66.0 67.0 66.0 to 69.0 67.4
Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index for early November fell back a very steep 4.6 points to a very weak 66.0. Weakness was split between current conditions and the outlook. The retreat in confidence was tied to the still contracting jobs market.
Released on 11/25/2009 8:30:00 AM For wk11/21, 2009
Prior Consensus Consensus Range Actual
New Claims - Level 505 K 495 K 460 K to 500 K 466 K
4-week Moving Average - Level 496.5 K
Highlights
Improvement in initial claims is picking up steam in what points to lower payroll losses for November's employment report. First time claims fell 35,000 in the Nov. 21 week to 466,000 (prior week revised 4,000 lower). The four-week average also broke below 500,000, down 16,5000 to 496,500. Continuing claims are also falling, down 190,000 to 5.423 million in data for the Nov.. 14 week, but here the change also reflects the expiration of benefits. Those receiving extended benefits fell 34,600 to 539,500. Continuing claims may be clouded but initial claims offer perhaps more reason for optimism than any other piece of economic data.
Released on 11/25/2009 8:30:00 AM For October, 2009
Prior Consensus Consensus Range Actual
Personal Income - M/M change 0.0 % 0.2 % 0.0 % to 0.3 % 0.2 %
Consumer Spending - M/M change -0.5 % 0.5 % 0.4 % to 0.8 % 0.7 %
Core PCE price index - M/M change 0.1 % 0.2 % 0.1 % to 0.2 % 0.2 %
Highlights
Personal income was mildly positive in October and spending was up as auto sales rebounded. Personal income in October edged up 0.2 percent, following a revised 0.2 percent rise in September. October's gain matched the consensus forecast. The important wages and salaries component, however, was flat after a 0.1 percent dip in September, indicating that consumer spending power is not improving.
We are seeing probably the final impact of cash-for-clunkers on personal spending in October. Motor vehicle sales fell sharply in September with the ending of incentives in August. In October, auto sales rebounded and returned to normal-at least for the recovery trend. Personal consumption expenditures jumped 0.7 percent after a 0.6 percent drop in September. The market had forecast a 0.5 percent boost in PCEs. The boost in October was led by durables, which rebounded 2.0 percent after an 8.8 percent plunge in September. In the latest month, nondurables rose 0.2 percent while services advanced 0.3 percent.
Inflation firmed in October. Headline PCE price inflation rose to 0.3 percent from a 0.1 percent rise in September. Core PCE inflation edged up to 0.2 percent in October from 0.1 percent the month before. The consensus had expected a 0.2 percent core gain for the latest month.
On initial blush, the October personal income report looks moderately good. But after taking into account weakness in wages and salaries and that the spending gain was a partial rebound from clunkers, it is indicative of a soft consumer sector.
Released on 11/25/2009 8:30:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Orders - M/M change 1.0 % 0.5 % 0.1 % to 1.5 % -0.6 %
New Orders - Yr/Yr Change -19.6 % -1.3 %
Highlights
The outlook for manufacturing cooled a bit in October. New orders for durable goods in October fell 0.6 percent, after a revised 2.0 percent rebound in September. The drop in October was well below the market forecast for a 0.5 percent boost. Excluding the transportation component, new durables orders fell 1.3 percent, following a 1.8 percent jump in September.
Highlights
Two prior weeks of big declines in the purchase index raised talk that however good October may have been good for home sales, November was likely to mark a reversal. But not so fast! The purchase index surged 9.6 percent in the Nov. 20 week, biting into mid single digit and low double digit declines in the prior two weeks (note MBA said the prior week was revised slightly lower but offered no further details). The sequence suggests that let down with the end of first-time buyer credits was limited to the beginning of November. Refinancing applications fell 9.5 percent in the week but still make up more than 70 percent of all applications, a reflection of extremely low mortgage rates including an average 4.82 percent for 30-year fixed loans.
Some worry about whether the economy could recover without government aid
WASHINGTON (MarketWatch) -- Federal Reserve officials believe the recovery is going to expand at a slow rate while unemployment will continue to remain high, according to the minutes of their closed-door Nov. 3 and Nov 4 meeting released Tuesday.
The Fed forecast that the U.S. unemployment rate could stay elevated in 2010 in the range of 9.3% to 9.7% and would only drop modestly to 8.6% in 2011, according to the summary of the latest meetings. The unemployment rate hit 10.2% in November, a 26-year high. The Fed forecast in June that the unemployment rate could hit a range of 9.5% to 9.8% in 2010 and 8.8% in 2011 in a slightly more negative projection.
Federal Reserve officials held a wide variety of opinions about the economic outlook and the central bank's policies at the November meeting.
At the end of its meetings, the Fed decided to keep interest rates at record lows. As expected, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. The votes for these policy actions were unanimous.
Most members forecast that the unemployment rate would remain quite elevated over the next couple of years while the level of inflation remained below the central bank's objective levels.
Participants agreed that the economy will continue to recover in subsequent quarters. However, some members of the committee expressed concern about the ability of the economy to generate a self-sustaining recovery without government support.
According to the summary, members noted that it was not clear how much of the recent improvement in the housing sector, consumer spending and general economic conditions reflected the effects of temporary fiscal programs to help the auto and housing sectors.
Some members said they view the improvements as "tentative," noting that the pending termination of a temporary tax credit for first-time homebuyers, increasing foreclosures and the winding down of a Federal Reserve mortgage-backed purchase program, could dampen the recovery.
The Fed is in the midst of purchasing $1.25 trillion in mortgage-backed securities and $175 billion in so-called agency debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks, which finance mortgage purchases.
Members discussed the possibility that the recovery could resemble the past two recoveries, which they characterized as having a slow pace of hiring for a time even after aggregate demand picked up.
Mortgage-backed security purchases
One of the key government support programs is set to be completed at the end of the first quarter of 2010. All members of the Fed reaffirmed the central bank's September decision to extend its purchases of mortgage-backed securities and asset-backed securities into the first quarter of 2010 to "smooth" them out and avoid any sudden end that might jolt markets."
So far, the agency has settled its purchases of roughly $847 billion in mortgage-backed securities, already more than two-thirds of its intended goal, according to a Federal Reserve statistical release on Thursday.
Members also reiterated their intention to gradually slow the pace of the purchases. They also agreed to evaluate the timing and overall amounts of purchases "in light of the evolving economic outlook and financial market conditions.
The Fed decided in its meeting to drop the total amount of purchases of agency debt to $175 billion from $200 billion.
2009 unemployment estimate
The FOMC estimated that the unemployment rate for 2009 would reach 10.1% -- less than the actual 10.2% unemployment rate recorded in November. Michael Feroli, an analyst at J.P. Morgan Chase Bank, noted that the Fed's open market committee did not have October payroll report at the time of their meeting to discuss these economic projections
Released on 11/24/2009 10:00:00 AM For November, 2009
Consumer Confidence - Level
Prior 47.7
Consensus 47.0
Consensus Range 44.0 to 47.0
Actual 49.5
Market Consensus Before Announcement
The Conference Board's consumer confidence index for October fell more than 5-1/2 points to 47.7 in October. The assessment of current conditions was alarming, at 20.7 for a nearly 2-1/2 point decline and the lowest reading yet of the cycle. The big concern was jobs. The expectations component also fell, down 8 points to 65.7. The drop in expectations was led by a fall in the proportion expecting higher income in coming months and by a larger share seeing a decrease in income.
Released on 11/24/2009 9:00:00 AM For Sep, 2009
Prior Actual
S&P/Case-Shiller Composite 10 157.93 158.61
S&P/Case-Shiller Composite 20 146.00 146.51
Highlights
Home prices continue to improve according to Case-Shiller data. The report's index for the top 10 cities rose 0.4 percent in September, on the low side of what is a long strong string of improvement. Year-on-year rates continue to improve, now down to single digit contraction at minus 8.5 percent for the 10 index. A look at the quarter-to-quarter rate shows steady improvement, at plus 3.1 percent for both the third and second quarters. Improvement is especially evident in the West and Florida, high flying areas hit hardest by the housing downturn. This report, noted for its vigorous methodology, continues to contrast with price data in the existing home sales report where contraction, though slowing a bit, is still underway. New home sales data for October will be posted tomorrow. Prices in this report did show improvement in September.
Released on 11/24/2009 8:55:00 AM For wk11/21, 2009
Prior Actual
Store Sales Y/Y change 2.0 % 2.8 %
Highlights
Retail sales are very strong this month, up 2.8 percent in the Nov. 21 week vs. the year-ago week, according to Redbook's same-store sales tally. In a month-to-month look, Redbook sees big gains for November, at 4.8 percent compared to October. The report said seasonal goods are in demand. This time next week, Redbook, together with rival ICSC-Goldman, will be posting results for the big Black Friday weekend.
On Thursday February 18, 2010, 4:46 pm
WASHINGTON (Reuters) - The Federal Reserve said on Thursday it was raising the interest rate it charges banks for emergency loans, citing improvement in financial market conditions.
The Fed said the discount rate would be increased to 0.75 percent from 0.50 percent, effective Friday.
"Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities," the Fed said in a statement.
"The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy," it said.
Released on 12/1/2009 10:00:00 AM For October, 2009
Prior Actual
Pending Home Sales Index - Level 110.1 114.1
Pending Home Sales Index - M/M 6.1 % 3.7 %
Highlights
Existing home sales got a giant boost in October from the pending expiration of the first round of buyer credits, a gain that raised questions whether sales rates were pulled forward and would dip in subsequent months. But today's pending home sales report points to continued strength ahead. Pending home sales jumped 3.7 percent in October to 114.1, adding to September's even more impressive 6.0 percent gain. Year-on-year pending home sales are up 31.8 percent. The housing sector appears to be moving off the bottom, underscored by the 4.4 percent rise in private residential construction also reported today at 10:00.
Released on 12/1/2009 10:00:00 AM For October, 2009
Prior Consensus Consensus Range Actual
Construction Spending - M/M change 0.8 % -0.4 % -1.5 % to 0.3 % 0.0 %
Market Consensus Before Announcement
Construction spending was sharply higher than expected for September but a large downward revision to August was essentially offsetting. Overall construction spending advanced 0.8 percent in September after slipping a downwardly revised 0.1 percent in August. The decrease in August was now significantly lower than the original estimate of a 0.8 percent gain. The boost in spending in September was led by a 3.8 percent surge in private residential outlays. Private nonresidential declined 1.8 percent and public outlays decreased 0.1 percent in the latest month.
Released on 12/1/2009 10:00:00 AM For November, 2009
Prior Consensus Consensus Range Actual
ISM Mfg Index - Level 55.7 55.0 53.8 to 56.0 53.6
Market Consensus Before Announcement
The composite index from the ISM manufacturing survey jumped more than 3 points in October to 55.7. This is the strongest for this index in more than three years. Showing the most improvement of the composite's components was the production index which advanced over 7-1/2 points to 63.3. But we may see some leveling off in the composite index in November as the new orders index eased from 60.8 in September to 58.5 in October, but still remained well in positive territory. Price increases were steady in the month, showing little change at 65.0 compared to 63.5 in September.
Released on 12/1/2009 8:55:00 AM For wk11/28, 2009
Prior Actual
Store Sales Y/Y change 2.8 % 3.8 %
Highlights
Redbook reports strong results for the Nov. 28 shopping week, with gains driven by strong electronics sales and aggressive markdowns across categories. Redbook's year-on-year tally in the week is plus 3.8 percent, up 1 full percentage point from the prior week for, by far, the strongest rate of the year. Month-to-month, Redbook projects an exceptionally strong 5.2 percent rise vs. October. If there is one negative, it's that deep markdowns will be hurting bottom lines. There was no reaction to the results, at least initially. Chain stores will post their own company data on Thursday.
Released on 12/1/2009 7:45:00 AM For wk11/28, 2009
Prior Actual
Store Sales - W/W change 0 % -0.1 %
Store Sales - Y/Y 3.3 % 3.1 %
Highlights
ICSC-Goldman reports only mild results for the big Nov. 28 shopping week, down 0.1 percent vs. the prior week for a year-on-year rate of plus 3.1 percent, a rate that's down 2 tenths from the prior week but, benefiting from an easy comparison, still the second best rate of the year. The report said consumers pushed back their holiday shopping, a negative for November but a plus for December. Redbook will be posted at 8:55 a.m. ET.
Starting tomorrow, Goldman Sachs employees aren’t allowed to gather in groups of 12 or more outside the office.
Goldman [GS 169.66 5.50 (+3.35%) ], if you recall, canceled its holiday party for a second year in a row — banker soirees being seen as somewhat bad form at time when it seems everybody else is standing in the unemployment line.
But, those crafty bankers found a way around the party prohibition: They started organizing small "dinners," often paid for by executives.
Determined to uphold its image of doing “God’s work,” as Lloyd Blankfein puts it, Goldman cracked the Christmas whip, sending a voicemail to employees a few weeks ago, instructing them to have no more private parties.
The ban, in place for the month of December, prohibits employees from gathering in groups of 12 or more, Business Insider reports.
So, 10 lords a leaping, nine ladies dancing=totally OK. But if you see 12 bankers — they'd better be banking!
No word on what the punishment is for excessive festiveness.
Released on 11/30/2009 9:45:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Business Barometer Index - Level 54.2 53.0 50.8 to 55.5 56.1
Highlights
Gains in new orders and a slowing in deliveries hightlight November's Chicago purchasers' report, offsetting further losses in employment and further draws in inventories. Chicgao's headline index rose nearly 2 points to 56.1 to indicate a month-to-month increase in the pace of overalll business activity in the area. New orders rose 1.4 points to a very strong 62.8, a plus-60 level that, because of its strength, will be hard to match in the coming months. Supplier deliveries rose 6.7 points to 57.4 to indicate a significant slowing in deliveries and congestion in the supply chain. Production, at 56.1, rose in the month but at a slower pace than October's very strong 63.9. Employment, at 41.9, indicates substantial month-to-month contraction but at a less severe pace than October's 38.3 level. Prices paid showed a mild month-to-month increase at 52.6, a result that raises no concern.
The report is a mild plus for the economic outlook especially the gain in new orders which points to strength in production and hopefully employment in the months ahead. Markets showed no reaction to the results. The ISM, which samples purchasers on a national scale, will post its reports this week with Tuesday set for the manufacturing report and Thursday for non-manufacturing. Note the Chicago report, which has no connection with the ISM, includes both manufacturers and non-manufacturers in its sample.
Market Consensus Before Announcement
The Chicago PMI jumped more than 8 points in October to 54.2. For the month, production surged nearly 17 points. We may see further improvement in November as the new orders index jumped more than 15 points.
Released on 11/25/2009 10:00:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Home Sales - Level - SAAR 402 K 410 K 385 K to 425 K 430 K
Market Consensus Before Announcement
New home sales in September fell 3.6 percent to a much lower-than-expected annual rate of 402,000. Supply on the market was steady and still elevated with months' unchanged at 7.5 months. However, it was a notable improvement from earlier in the year and especially against the year-ago level of 10.9 months. Apparently, the likely reason that existing home sales did well in September but not new home sales is that homebuilders were trying to keep sales prices up while those in existing home have been more willing on price concessions. The median price of new homes rose 2.5 percent in the latest month to $204,800.
Released on 11/25/2009 9:55:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Sentiment Index - Level 66.0 67.0 66.0 to 69.0 67.4
Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index for early November fell back a very steep 4.6 points to a very weak 66.0. Weakness was split between current conditions and the outlook. The retreat in confidence was tied to the still contracting jobs market.
This stock has gained 15,900% from 03/2009 to present.
It was $0.21 and it's $33.49 now.
Released on 11/25/2009 8:30:00 AM For wk11/21, 2009
Prior Consensus Consensus Range Actual
New Claims - Level 505 K 495 K 460 K to 500 K 466 K
4-week Moving Average - Level 496.5 K
Highlights
Improvement in initial claims is picking up steam in what points to lower payroll losses for November's employment report. First time claims fell 35,000 in the Nov. 21 week to 466,000 (prior week revised 4,000 lower). The four-week average also broke below 500,000, down 16,5000 to 496,500. Continuing claims are also falling, down 190,000 to 5.423 million in data for the Nov.. 14 week, but here the change also reflects the expiration of benefits. Those receiving extended benefits fell 34,600 to 539,500. Continuing claims may be clouded but initial claims offer perhaps more reason for optimism than any other piece of economic data.
Released on 11/25/2009 8:30:00 AM For October, 2009
Prior Consensus Consensus Range Actual
Personal Income - M/M change 0.0 % 0.2 % 0.0 % to 0.3 % 0.2 %
Consumer Spending - M/M change -0.5 % 0.5 % 0.4 % to 0.8 % 0.7 %
Core PCE price index - M/M change 0.1 % 0.2 % 0.1 % to 0.2 % 0.2 %
Highlights
Personal income was mildly positive in October and spending was up as auto sales rebounded. Personal income in October edged up 0.2 percent, following a revised 0.2 percent rise in September. October's gain matched the consensus forecast. The important wages and salaries component, however, was flat after a 0.1 percent dip in September, indicating that consumer spending power is not improving.
We are seeing probably the final impact of cash-for-clunkers on personal spending in October. Motor vehicle sales fell sharply in September with the ending of incentives in August. In October, auto sales rebounded and returned to normal-at least for the recovery trend. Personal consumption expenditures jumped 0.7 percent after a 0.6 percent drop in September. The market had forecast a 0.5 percent boost in PCEs. The boost in October was led by durables, which rebounded 2.0 percent after an 8.8 percent plunge in September. In the latest month, nondurables rose 0.2 percent while services advanced 0.3 percent.
Inflation firmed in October. Headline PCE price inflation rose to 0.3 percent from a 0.1 percent rise in September. Core PCE inflation edged up to 0.2 percent in October from 0.1 percent the month before. The consensus had expected a 0.2 percent core gain for the latest month.
On initial blush, the October personal income report looks moderately good. But after taking into account weakness in wages and salaries and that the spending gain was a partial rebound from clunkers, it is indicative of a soft consumer sector.
Released on 11/25/2009 8:30:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Orders - M/M change 1.0 % 0.5 % 0.1 % to 1.5 % -0.6 %
New Orders - Yr/Yr Change -19.6 % -1.3 %
Highlights
The outlook for manufacturing cooled a bit in October. New orders for durable goods in October fell 0.6 percent, after a revised 2.0 percent rebound in September. The drop in October was well below the market forecast for a 0.5 percent boost. Excluding the transportation component, new durables orders fell 1.3 percent, following a 1.8 percent jump in September.
Highlights
Two prior weeks of big declines in the purchase index raised talk that however good October may have been good for home sales, November was likely to mark a reversal. But not so fast! The purchase index surged 9.6 percent in the Nov. 20 week, biting into mid single digit and low double digit declines in the prior two weeks (note MBA said the prior week was revised slightly lower but offered no further details). The sequence suggests that let down with the end of first-time buyer credits was limited to the beginning of November. Refinancing applications fell 9.5 percent in the week but still make up more than 70 percent of all applications, a reflection of extremely low mortgage rates including an average 4.82 percent for 30-year fixed loans.
Dow and SP are green now.
It's so easy for HB&Bs to pull market up: borrow money from government at no cost to short dollar and buy gold.
Some worry about whether the economy could recover without government aid
WASHINGTON (MarketWatch) -- Federal Reserve officials believe the recovery is going to expand at a slow rate while unemployment will continue to remain high, according to the minutes of their closed-door Nov. 3 and Nov 4 meeting released Tuesday.
The Fed forecast that the U.S. unemployment rate could stay elevated in 2010 in the range of 9.3% to 9.7% and would only drop modestly to 8.6% in 2011, according to the summary of the latest meetings. The unemployment rate hit 10.2% in November, a 26-year high. The Fed forecast in June that the unemployment rate could hit a range of 9.5% to 9.8% in 2010 and 8.8% in 2011 in a slightly more negative projection.
Federal Reserve officials held a wide variety of opinions about the economic outlook and the central bank's policies at the November meeting.
At the end of its meetings, the Fed decided to keep interest rates at record lows. As expected, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. The votes for these policy actions were unanimous.
Most members forecast that the unemployment rate would remain quite elevated over the next couple of years while the level of inflation remained below the central bank's objective levels.
Participants agreed that the economy will continue to recover in subsequent quarters. However, some members of the committee expressed concern about the ability of the economy to generate a self-sustaining recovery without government support.
According to the summary, members noted that it was not clear how much of the recent improvement in the housing sector, consumer spending and general economic conditions reflected the effects of temporary fiscal programs to help the auto and housing sectors.
Some members said they view the improvements as "tentative," noting that the pending termination of a temporary tax credit for first-time homebuyers, increasing foreclosures and the winding down of a Federal Reserve mortgage-backed purchase program, could dampen the recovery.
The Fed is in the midst of purchasing $1.25 trillion in mortgage-backed securities and $175 billion in so-called agency debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks, which finance mortgage purchases.
Members discussed the possibility that the recovery could resemble the past two recoveries, which they characterized as having a slow pace of hiring for a time even after aggregate demand picked up.
Mortgage-backed security purchases
One of the key government support programs is set to be completed at the end of the first quarter of 2010. All members of the Fed reaffirmed the central bank's September decision to extend its purchases of mortgage-backed securities and asset-backed securities into the first quarter of 2010 to "smooth" them out and avoid any sudden end that might jolt markets."
So far, the agency has settled its purchases of roughly $847 billion in mortgage-backed securities, already more than two-thirds of its intended goal, according to a Federal Reserve statistical release on Thursday.
Members also reiterated their intention to gradually slow the pace of the purchases. They also agreed to evaluate the timing and overall amounts of purchases "in light of the evolving economic outlook and financial market conditions.
The Fed decided in its meeting to drop the total amount of purchases of agency debt to $175 billion from $200 billion.
2009 unemployment estimate
The FOMC estimated that the unemployment rate for 2009 would reach 10.1% -- less than the actual 10.2% unemployment rate recorded in November. Michael Feroli, an analyst at J.P. Morgan Chase Bank, noted that the Fed's open market committee did not have October payroll report at the time of their meeting to discuss these economic projections
Released on 11/24/2009 10:00:00 AM For November, 2009
Consumer Confidence - Level
Prior 47.7
Consensus 47.0
Consensus Range 44.0 to 47.0
Actual 49.5
Market Consensus Before Announcement
The Conference Board's consumer confidence index for October fell more than 5-1/2 points to 47.7 in October. The assessment of current conditions was alarming, at 20.7 for a nearly 2-1/2 point decline and the lowest reading yet of the cycle. The big concern was jobs. The expectations component also fell, down 8 points to 65.7. The drop in expectations was led by a fall in the proportion expecting higher income in coming months and by a larger share seeing a decrease in income.
Released on 11/24/2009 9:00:00 AM For Sep, 2009
Prior Actual
S&P/Case-Shiller Composite 10 157.93 158.61
S&P/Case-Shiller Composite 20 146.00 146.51
Highlights
Home prices continue to improve according to Case-Shiller data. The report's index for the top 10 cities rose 0.4 percent in September, on the low side of what is a long strong string of improvement. Year-on-year rates continue to improve, now down to single digit contraction at minus 8.5 percent for the 10 index. A look at the quarter-to-quarter rate shows steady improvement, at plus 3.1 percent for both the third and second quarters. Improvement is especially evident in the West and Florida, high flying areas hit hardest by the housing downturn. This report, noted for its vigorous methodology, continues to contrast with price data in the existing home sales report where contraction, though slowing a bit, is still underway. New home sales data for October will be posted tomorrow. Prices in this report did show improvement in September.
Released on 11/24/2009 8:55:00 AM For wk11/21, 2009
Prior Actual
Store Sales Y/Y change 2.0 % 2.8 %
Highlights
Retail sales are very strong this month, up 2.8 percent in the Nov. 21 week vs. the year-ago week, according to Redbook's same-store sales tally. In a month-to-month look, Redbook sees big gains for November, at 4.8 percent compared to October. The report said seasonal goods are in demand. This time next week, Redbook, together with rival ICSC-Goldman, will be posting results for the big Black Friday weekend.