{"id":374,"date":"2014-11-26T08:58:58","date_gmt":"2014-11-26T13:58:58","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=374"},"modified":"2014-12-05T16:47:09","modified_gmt":"2014-12-05T21:47:09","slug":"october-consumption-income-durable-goods-orders-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=374","title":{"rendered":"October Consumption, Income, Durable Goods Orders and Weekly Jobless Claims"},"content":{"rendered":"

KEY DATA:<\/strong> Consumption: +0.2%; Real Disposable Income: +0.1%\/Orders: +0.4%; Business Investment: -1.3%\/Jobless Claims: 313,000 (up 21,000)<\/p>\n

IN A NUTSHELL:<\/strong> \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153On a day where there are a rafter of data, only some of them are turkeys.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong> \u00c2\u00a0The long weekend has created a backlog of numbers and they are all coming out this morning.\u00c2\u00a0 The first group were somewhat mixed.\u00c2\u00a0 Consumer spending continued to improve in October<\/em><\/strong>, which is very good news.\u00c2\u00a0 Indeed, it rose despite a reduction in durable goods demand.\u00c2\u00a0 That was a little odd as total vehicle sales edged upward.<\/em><\/strong>\u00c2\u00a0 A solid holiday shopping season could push consumer demand up to 3% for the fourth quarter, which is where I have it.\u00c2\u00a0 As for income growth, that was not as strong as we would like, but conditions are clearly changing.<\/em><\/strong> \u00c2\u00a0While gains are not spectacular, total wages and salaries have increased by 4.4% over the year.<\/em><\/strong>\u00c2\u00a0 Yes, some of that is due to more jobs, but about half is due to actual wage increases.<\/em><\/strong>\u00c2\u00a0 Still, adjusted for inflation, average wage increases continue to lag.<\/p>\n

On the manufacturing front, durable goods orders rose in October.<\/em><\/strong>\u00c2\u00a0 That was a bit of a surprise, but the details are what matter.\u00c2\u00a0 There was a 45% increase in defense aircraft orders and that is not likely to be repeated given the spending restraints in place.\u00c2\u00a0 Excluding defense, orders were down sharply.<\/em><\/strong>\u00c2\u00a0 In addition, the best measure of business investment<\/em>, nondefense, nonaircraft capital goods orders, posted a second consecutive 1.5% drop.\u00c2\u00a0 That is not a sign of aggressive business investment activity.\u00c2\u00a0 <\/em><\/strong>Order books are filling, so that should lead to more production.<\/p>\n

Finally, there was the very strange large surge in weekly jobless claims.<\/em><\/strong>\u00c2\u00a0\u00c2\u00a0 The individual state data don\u00e2\u20ac\u2122t seem to jive with the overall change so it is hard to really know why that happened.<\/em><\/strong>\u00c2\u00a0 Also, Thanksgiving is late this year so maybe there was an issue with the seasonal factors.\u00c2\u00a0 In any event, this number should be viewed with caution.\u00c2\u00a0 We need to see what happens over the next few weeks to determine if the labor market tightening process is moderating.\u00c2\u00a0 Keep in mind; the level is still consistent with solid, though not robust, job gains.<\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> It is unclear what to make of today\u00e2\u20ac\u2122s numbers.\u00c2\u00a0 Nothing was overly strong and there were some weak reports as well.\u00c2\u00a0 So the best that can be said is that confusion about the strength of fourth quarter growth remains high.<\/em><\/strong>\u00c2\u00a0 The estimates range from the low 1% to over 4%, which shows that economists are clueless right now about what is happening.\u00c2\u00a0 I still think we could approach 4%, but we need a really good holiday shopping season.\u00c2\u00a0 So, go out and spend like crazy this next week.<\/em><\/strong><\/p>\n

Have a Happy Thanksgiving!<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Consumption: +0.2%; Real Disposable Income: +0.1%\/Orders: +0.4%; Business Investment: -1.3%\/Jobless Claims: 313,000 (up 21,000) IN A NUTSHELL: \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153On a day where there are a rafter of data, only some of them are turkeys.\u00e2\u20ac\u009d WHAT IT MEANS: \u00c2\u00a0The long weekend has created a backlog of numbers and they are all coming out this morning.\u00c2\u00a0 … Continue reading October Consumption, Income, Durable Goods Orders and Weekly Jobless Claims<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47,28,3,24],"tags":[],"class_list":["post-374","post","type-post","status-publish","format-standard","hentry","category-consumer-spending-and-income","category-durable-goods-orders","category-economic-indicators","category-weekly-jobless-claims"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/374","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=374"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/374\/revisions"}],"predecessor-version":[{"id":375,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/374\/revisions\/375"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}