{"id":376,"date":"2014-11-25T09:53:27","date_gmt":"2014-11-25T14:53:27","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=376"},"modified":"2014-12-05T16:44:21","modified_gmt":"2014-12-05T21:44:21","slug":"revised-third-quarter-gdp-and-november-consumer-confidence","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=376","title":{"rendered":"Revised Third Quarter GDP and November Consumer Confidence"},"content":{"rendered":"

KEY DATA:<\/strong> GDP: 3.9% (up from 3.5%); Year-over-Year: 2.4%; Corporate Profits: +2.1%\/Consumer Confidence: down 5.4 points<\/p>\n

IN A NUTSHELL:<\/strong> \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The economy really is growing solidly, which makes the decline in confidence very strange.\u00e2\u20ac\u009d <\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong> \u00c2\u00a0Is the economy accelerating?\u00c2\u00a0 It sure looks that way.<\/em><\/strong> \u00c2\u00a0The upward revision to the summer economic performance was a surprise<\/em><\/strong>, but it was not caused by anything that could be considered strange.\u00c2\u00a0 Both consumer and business spending was a bit better<\/em><\/strong>, but the changes were not large.\u00c2\u00a0 Similarly, government spending was cut<\/em><\/strong>, but also by a modest amount.\u00c2\u00a0 The trade deficit turned out to be wider than initially thought but businesses stocked up for the holiday shopping season at a greater pace<\/em><\/strong>, offsetting the negative impact of trade on growth.\u00c2\u00a0 All-in-all, the changes came in all the right places. \u00c2\u00a0Inflation remained in check, which was expected, but there was a downgrade to personal income growth.<\/em><\/strong>\u00c2\u00a0 That is not good news for employees.\u00c2\u00a0 Corporate profits rose at a modest rate as well.\u00c2\u00a0 <\/em><\/strong><\/p>\n

Meanwhile, in the face of declining gasoline prices, improving economic activity, strong job gains and a lower unemployment rate, consumers suddenly turned sullen.\u00c2\u00a0 The Conference Board\u00e2\u20ac\u2122s Consumer Confidence Index dropped sharply in November<\/em><\/strong> after having risen solidly in October.\u00c2\u00a0 There was an especially large decline in expectations as the labor market outlook seemed to dim.\u00c2\u00a0 These results were quite a surprise and given all the positive economic news, are hard to explain.\u00c2\u00a0 <\/em><\/strong><\/p>\n

Meanwhile, the slowdown in home price appreciation continued in September. The S&P\/Case-Shiller national index fell slightly and the year-over-year gain came down again.<\/em><\/strong> It is hardly a surprise that the huge increases we had been seeing have disappeared but it is disturbing that we are not seeing some continued monthly gains.<\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> If the consumer confidence numbers had come in as expected, I would be talking about the economy being off to the races.\u00c2\u00a0 But the sharp decline does raise some question<\/em><\/strong>s, though I am not sure what they are.\u00c2\u00a0 Basically, there is every reason but one to believe that people should be feeling better about things.\u00c2\u00a0 That reason is wages, or lack thereof.<\/em><\/strong>\u00c2\u00a0 Nothing else should be standing in the way of this economy really picking up steam. <\/em><\/strong>\u00c2\u00a0But businesses have done a great job of keeping worker demands for higher wages at bay and until the pendulum swings back to employees, firms will continue limiting pay increases to their workforces.\u00c2\u00a0 The Fed members are likely to take these reports in stride, as they really do not change anything.\u00c2\u00a0 But investors have to start wondering what shoppers are really thinking.\u00c2\u00a0 I believe this will be a really solid holiday season, but we need happy consumers for that to happen.\u00c2\u00a0 <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: GDP: 3.9% (up from 3.5%); Year-over-Year: 2.4%; Corporate Profits: +2.1%\/Consumer Confidence: down 5.4 points IN A NUTSHELL: \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The economy really is growing solidly, which makes the decline in confidence very strange.\u00e2\u20ac\u009d WHAT IT MEANS: \u00c2\u00a0Is the economy accelerating?\u00c2\u00a0 It sure looks that way. \u00c2\u00a0The upward revision to the summer economic performance was a … Continue reading Revised Third Quarter GDP and November Consumer Confidence<\/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":[15,3,7],"tags":[],"class_list":["post-376","post","type-post","status-publish","format-standard","hentry","category-consumer-sentiment","category-economic-indicators","category-gross-domestic-product"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/376","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=376"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/376\/revisions"}],"predecessor-version":[{"id":377,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/376\/revisions\/377"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}