THE REAL STATE OF THE UNION Just the Facts Economic Reports Continue To Disappoint. Tuesday, January 28, 9:25 a.m. As I noted in my weekend column, so far in 2014 economic reports have not been supportive of the Fed’s contention in December that the economy is finally on a sustained recovery pace. In the month since the Fed’s taper decision, economic reports from key areas of the economy; jobs, housing, auto sales, and consumer confidence, have not been impressive. There was that horrific shock of only 74,000 jobs created in December. New home starts plunged 9.8% in December. Permits for future starts fell 3.0%. Although up for the full year, existing home sales in the 4th quarter were down 27.9% from the same quarter of 2012. Mortgage applications continued their sharp decline, ending December at the lowest level in 13 years. Auto sales slowed significantly in December in spite of the return of rebates and zero percent financing to entice buyers. Consumer sentiment fell in December to 80.4 versus the consensus forecast of an improvement to 84.0. There have been additional discouraging reports this week. Yesterday it was more confirmation that the important housing industry is slowing, with the report that new home sales fell 7% in December, while previously reported numbers for November were revised down. This morning it was that Durable Goods Orders plunged 4.3% in December, the biggest decline since last summer, and significantly worse than the consensus forecast of an increase of 1.8%. It adds to the importance of the first look at 4th quarter GDP growth, which will be reported Thursday morning. The consensus forecast is for 3.3% growth. But these December reports that are considerably less than forecasts, and downward revision of November reports, raises questions about how accurate the GDP forecasts will be.
Posted on: Wed, 29 Jan 2014 02:50:58 +0000
Trending Topics
Recently Viewed Topics
© 2015