{"id":1444,"date":"2019-01-29T11:35:04","date_gmt":"2019-01-29T16:35:04","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=1444"},"modified":"2019-01-29T11:35:07","modified_gmt":"2019-01-29T16:35:07","slug":"january-consumer-confidence-small-business-employment-and-november-home-prices","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1444","title":{"rendered":"January Consumer Confidence, Small Business Employment and November Home Prices"},"content":{"rendered":"\n

KEY DATA:<\/strong> Confidence: -6.4 points;\nExpectations: -10.4 points\/ Jobs Index (Over-Year): -0.96%\/ Home Prices (Monthly):\n+0.4%; (Over-Year): +5.2% <\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u00e2\u20ac\u0153The shutdown not only hurt the economy but it\nbattered household feelings about the future.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong> It\u00e2\u20ac\u2122s\ntime to get back to real economic issues and put the partial federal government\nshutdown behind us, which may take some time. \nOne place where the insane decision to close government offices had a\nmajor effect was, not surprisingly, on consumer confidence.  The Conference Board\u00e2\u20ac\u2122s January reading of household\nsentiment dropped sharply.<\/em><\/strong>  While\ncurrent conditions were largely flat, an indication the economy continues to\nexpand decently, the expectations measure cratered<\/em><\/strong>.  It\u00e2\u20ac\u2122s hard to be confident about the future\nwhen the government is so dysfunctional. \nStill, the economic impacts of declining confidence that results from\npolitical events are usually modest, so don\u00e2\u20ac\u2122t expect households to suddenly\nstart cutting back spending sharply.  <\/em><\/strong><\/p>\n\n\n\n

Friday, the employment report is expected to be\nreleased.  It may be a little better than\nexpected as the Paychex\/Markit IHS small business jobs index rose slightly in\nJanuary. <\/em><\/strong> Still, it is likely to be a lot weaker than the huge\n312,000 gains reported for December<\/em><\/strong>. \nI think it could be closer to 125,000. Looking forward, the downward\ntrend in the small business jobs index points to softer job gains in the\nfuture.<\/p>\n\n\n\n

The S&P CoreLogic Case-Shiller national index rose\nmoderately in November, but the year-over-over gain continues to decelerate. <\/em><\/strong> Costs in the largest metro areas seem to be\neasing back faster than in other areas.  Growing\neconomic uncertainty is likely to restrain housing demand, but at least\nmortgage rates have backed down, which should keep sales from faltering.<\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  Well, the government\nshutdown is over and hopefully this will be the last one for a while.  Every once in a while, the wackos who run\nWashington think that refusing to fund government operations is a good idea and\nthey proceed to do that.  And as usual,\nthey learn that government shutdowns are not very good ideas<\/em><\/strong>.  Of course, most politicians have very short\nmemories, so I cannot rule out another one, though I doubt that will happen at\nthe end of the current deadline.  That\nsaid, the Congressional Budget Office made it clear that there will be\nlasting effects and the total is likely a lower bound.<\/em><\/strong>  The impacts on businesses not able to operate\neffectively, whether it was due to regulatory or lending issues, is hard to\nestimate.  And don\u00e2\u20ac\u2122t think going forward\nthat the government workers will spend at the pace they had been before the\nshutdown.  Their rainy day funds will\nlook more like hurricane funds.  The\nFed is meeting today and tomorrow and with little indications the chaos in\nWashington will subside anytime soon, the better part of valor is to punt.  Look for the statement and the comments of\nthe Chair to mention that the uncertainty will be watched carefully.  That, in real world language, means the\nmembers will take their time deciding when to raise rates again.<\/em><\/strong>  With the trade situation with China in flux,\nthat wait could last a while. <\/em><\/strong> I originally\nput on my forecast an April\/May meeting move and that is still possible, but I\nam not so sure.  The Chinese economy is\nnot likely growing anywhere near the 6.5% pace the government claims and until\nwe see demand pick up, a significant slowdown in the world\u00e2\u20ac\u2122s second\nlargest economy has to be taken into consideration when setting monetary policy.  My point is that the rate hikes were not the\nmajor problem facing the economy and the markets; the trade war was and\nis.  Until this issue is settled, the Fed\nis likely to move very slowly as a full out trade war could send the world\neconomy into recession. <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Confidence: -6.4 points; Expectations: -10.4 points\/ Jobs Index (Over-Year): -0.96%\/ Home Prices (Monthly): +0.4%; (Over-Year): +5.2% IN A NUTSHELL:  \u00e2\u20ac\u0153The shutdown not only hurt the economy but it battered household feelings about the future.\u00e2\u20ac\u009d WHAT IT MEANS: It\u00e2\u20ac\u2122s time to get back to real economic issues and put the partial federal government shutdown … Continue reading January Consumer Confidence, Small Business Employment and November Home Prices<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1444","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1444"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1444\/revisions"}],"predecessor-version":[{"id":1445,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1444\/revisions\/1445"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}