Weekly economic and financial commentary
|Summary
United States: Household Spending Surges Despite Fastest Inflation in 30+ Years
- Inflation is no doubt a headwind, but in October at least, it was not enough to stop consumers from spending, with a real personal spending pickup of 0.7%. With a five-handle on the PCE deflator, inflation is higher now than at any point since 1990. The headline PCE deflator came in at 5.0% year-over-year in October and core PCE was 4.1%.
- Seasonal adjustment factors may have played a role in the drop in jobless claims to their lowest level since 1969.
- Existing home sales rose to a nine-month high and new home sales are moving faster than they have since the height of the spring selling season in April.
- Next week: Construction Spending (Wed), ISM Manufacturing (Wed), Employment (Fri)
International: Unexpected Resilience for Europe's PMI Surveys
- November PMI surveys for the Eurozone and the United Kingdom were stronger than expected, while also indicating ongoing supply disruptions in the form of lengthening supplier delivery times, as well as higher costs and prices. For the U.K., the PMIs are likely another reason for the Bank of England to raise interest rates in December. For the Eurozone, worsening future output expectations and a drop in German IFO business confidence hint at a softer PMI in December.
- Next week: China PMIs (Tues), Eurozone CPI (Tues), Canada GDP (Tues)
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