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Economic Update 12/30/13

A HOLIDAY SHOPPING SEASON TO CELEBRATE

Good news from the Commerce Department: November brought a healthy 0.5% gain in personal spending (matching the consensus forecast of economists polled by Briefing.com) and a 0.2% rise in personal income that offset the 0.1% retreat in October. SpendingPulse, which tracks online and in-store retail purchases, says that retail sales increased 3.5% during the holiday season. It reports that 2013’s holiday spending was 2.3% greater than in 2012; the International Council of Shopping Centers puts the gain at 2.7%.

NO CHANGE IN CONSUMER SENTIMENT

Against expectations, the University of Michigan’s final December consumer sentiment index came in at 82.5 – exactly where it was at the end of November. Analysts surveyed by Briefing.com had projected the index to end 2013 at 83.3.

NEW HOME SALES DOWN, BUT UP FROM SUMMER

November’s 2.1% dip in new home buying seemed to reflect buyers adjusting to higher mortgage rates. Still, the pace of new home purchases (a seasonally adjusted annual rate of 464,000) was up nicely from July and August (when it was below 400,000). In November, new home sales were up 17% from a year ago; the Commerce Department noted a median price of $270,900, representing a 10.6% year-over-year gain.

MORE DEMAND FOR DURABLES

Orders for hard goods were up 3.5% in November, 1.2% with transportation orders removed. The Census Bureau revised its October durable goods report to show an 0.7% overall retreat.

STOCKS POST WEEKLY GAINS

A short trading week saw the S&P 500 advancing another 1.27% to 1,841.40, the Dow climbing 1.59% to 16,478.41 and the NASDAQ gaining 1.26% to 4,156.59.

THIS WEEK: Monday, the National Association of Realtors puts out its November pending home sales report. October’s S&P/Case-Shiller Home Price Index and the Conference Board’s December consumer confidence index both appear on Tuesday; New Year’s Eve is a regular trading day for both the NYSE and NASDAQ, but the U.S. bond market should wrap things up at 2:00pm EST. U.S. financial markets are closed Wednesday (New Year’s Day). ISM’s December manufacturing PMI is the big news item on Thursday, with weekly jobless claims figures also being released. Friday, the Commerce Department issues data on December car and truck sales.

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