The clinching of tax cuts will be front and center
but it will also be a telling week for the fourth-quarter economy.
Data will include a full run down of the housing sector and whether it
can extend its emerging momentum, starting Monday with the housing
market index from the nation's home builders followed on Tuesday by
housing starts and permits. Existing home sales will be Wednesday's
highlight followed on Friday by new home sales. Friday will also see
the release of two other central indicators on the economy: durable
goods orders for the latest on the factory sector and personal income
& outlays for updates on both the health of the consumer and, very
importantly, the pace of inflation. There's strong optimism for durable
goods and consumer spending but much less so for core PCE inflation.
Monday
Housing Market Index for December
Consensus Forecast: 70
Consensus Range: 69 to 71
Home builders have been reporting rising confidence going into year end with the housing market index
moving 4 points higher in October to 68 followed by a 2 point gain in
November to 70 and the best reading since March. Strength in this
report has not translated this year to equivalent strength in actual
housing data though new home sales have in fact been coming alive in
recent months. Forecasters see December's index holding at 70.
Tuesday
Housing Starts for November
Consensus Forecast, Adjusted Annualized Rate: 1.240 million
Consensus Range: 1.191 to 1.290 million
Building Permits
Consensus Forecast: 1.270 million
Consensus Range: 1.250 to 1.310 million
Housing starts and permits had been flat most of
the year but they did accelerate sharply in October, up 13.7 percent
for starts to a 1.290 million annualized rate and up 7.4 percent for
permits to 1.316 million. October's highlights included starts for
single-family homes, up 5.3 percent to an 877,000 rate, and permits for
multi-family homes which rose 15.9 percent to 466,000. Forecasters see
give back in November with the consensus for starts at 1.240 million and permits at 1.270 million.
Current Account Deficit for Third Quarter
Consensus Forecast: -$116.7 billion
Consensus Range: -$119.9 to -$113.5 billion
Benefiting from higher exports and lower imports, the current account deficit is
expected to narrow sharply in the third quarter, to $116.7 billion
from $123.1 billion in the second quarter. The account deficit relative
to GDP has been moderate, at 2.6 percent in the second quarter.
Wednesday
Existing Home Sales for November
Consensus Forecast, Annualized Rate: 5.520 million
Consensus Range: 5.430 to 5.700 million
New home sales have been climbing sharply while existing home sales
showed strength of their own in October, up 2.0 percent to a 5.480
million annualized rate. Gains were posted for single-family resales,
up 2.1 percent to a 4.870 million rate, and condos, up 1.7 percent to a
610,000 rate. The pending home sales index, which tracks initial
signings for resales, jumped strongly in the last report and have
forecasters looking for significant strength in this report for
November, at a consensus rate of 5.520 million.
Thursday
Real GDP: 3rd Quarter, 3rd Estimate, Annualized Rate
Consensus Forecast: 3.3%
Consensus Range: 3.1% to 3.4%
Real Consumer Spending, Annualized Rate
Consensus Forecast: 2.3%
Consensus Range: 2.2% to 2.4%
GDP Price Index
Consensus Forecast: 2.1%
Consensus Range: 2.1% to 2.1%
The third estimate for third-quarter GDP is expected to come in at a 3.3 percent annualized rate and unchanged from the second estimate. Consumer spending,
also seen unchanged at 2.3 percent, provided some lift but the quarter
really depended on an inventory build as well as strength in
nonresidential investment and improvement in net exports. The GDP price index is seen unchanged a 2.1 percent rate.
Initial Jobless Claims for December 16 week
Consensus Forecast: 234,000
Consensus Range: 230,000 to 240,000
Initial claims are expected to
come in at 234,000 in the December 16 week vs 225,000 in the December 9
week. Claims have been very low and very favorable though Puerto Rico,
and the backlog effects of Hurricane Maria, have been inflating the
total by several thousand.
Philadelphia Fed Manufacturing Index for December
Consensus Forecast: 21.8
Consensus Range: 17.5 to 25.0
A little cooling is welcome when it comes to the Philly Fed manufacturing index as
it was in November when the headline index slowed slightly to what is
still a very strong 22.7. New orders and shipments were both just over
20 in November with unfilled orders building sharply, at 17.0 for a 6.1
point gain. Respondents in this sample have been struggling to keep up
with the work as employment, at 22.6 in November, fell 8 points from
October's 48-year record. Econoday's consensus for December's headline
is 21.8.
National Activity Index for November
Consensus Forecast: 0.20
Consensus Range: 0.05 to 0.40
Upward reversals from hurricane effects gave a big lift to October's national activity index
which jumped nearly 1/2 point to 0.65 for a new expansion high. For
November, retail sales were strong but industrial production was soft.
Econoday's consensus for November is plus 0.20.
FHFA House Price Index for October
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.4% to 0.5%
Home prices have been one of the strongest areas of the 2017 economy though FHFA's house price index
did slow in the last report to only 0.3 percent monthly growth for a
year-on-year rate of 6.3 percent which is the lowest since January. A
little bounce is expected for November where the consensus is calling
for a 0.4 percent gain.
Index of Leading Economic Indicators for November
Consensus Forecast, Month-to-Month Change: 0.3%
Consensus Range: 0.0% to 0.4%
Hurricane effects on unemployment claims and the factory workweek made for volatility in the index of leading economic indicators
which surged 1.2 percent in October after posting only a 0.1 percent
gain in September. Forecasters see the index returning back to steady
growth at a consensus of 0.3 percent for December.
Friday
Durable Goods Orders for November
Consensus Forecast, Month-to-Month Change: 2.0%
Consensus Range: 1.3% to 3.5%
Durable Goods Orders, Ex-Transportation
Consensus Forecast: 0.6%
Consensus Range: 0.3% to 1.1%
Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)
Consensus Forecast: 0.3%
Consensus Range: 0.2% to 1.0%
Boeing orders from Dubai's air show are expected to help lift durable goods orders
in November where the consensus calls for a 2.0 percent gain that
would resume, after October's 0.8 percent dip, what had been a
late-year burst of strength for the factory sector. Excluding transportation equipment, orders are expected to show less strength but at a still very solid 0.6 percent increase while core capital goods orders are expected to bounce back from an October decline with a 0.3 percent gain.
Personal Income for November
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.3% to 0.5%
Consumer Spending
Consensus Forecast, Month-to-Month Change: 0.5%
Consensus Range: 0.3% to 0.6%
PCE Price Index
Consensus Forecast, Month-to-Month Change: 0.3%
Consensus Range: 0.2% to 0.3%
PCE Price Index
Consensus Forecast, Year-on-Year Change: 1.8%
Consensus Range: 1.7% to 1.8%
Core PCE Price Index
Consensus Forecast, Month-to-Month Change: 0.1%
Consensus Range: 0.1% to 0.3%
Core PCE Price Index
Consensus Forecast, Year-on-Year Change: 1.5%
Consensus Range: 1.5% to 1.6%
Income and spending growth were respectable in
October and the core PCE price index did show limited but still welcome
improvement. For November, personal income is seen rising 0.4 percent while consumer spending, getting a boost from the month's surge in retail sales, is expected to come in at 0.5 percent. The PCE price index is expected to rise 0.3 percent for a year-on-year rate of 1.8 percent with the core PCE price index,
which rose 0.2 percent in October and which excludes both food and
energy, seen up only 0.1 percent for a yearly 1.5 percent.
New Home Sales for November
Consensus Forecast, Annualized Rate: 650,000
Consensus Range: 623,000 to 690,000
New home sales have surged the last two reports
with monthly gains of 6.2 and 14.2 percent to an expansion high 685,000
annualized rate. Supply has been coming into the market and prices
have been coming down which are both positives for sales. The consensus
for November new home sales is for a tangible come back to a 650,000 annualized rate.
Consumer Sentiment Index, Final December
Consensus Forecast: 97.0
Consensus Range: 96.0 to 99.0
The consumer sentiment index has
been edging back from a 100.7 expansion peak in October but still came
in at a very solid 96.8 in the preliminary reading for December. The
current conditions component showed special strength in December's
first report in what was a positive indication for holiday sales.
Econoday's consensus for the final December index is 97.0.
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