This week’s Weekly Economic Update highlights a strong Thanksgiving performance in stocks. The major benchmark stock indexes closed higher, led by the Dow and the Russell 2000. Financials, consumer staples, and industrials led the market sectors, with only energy and communication services declining. Yields on 10-year Treasuries fell for the second consecutive week. Crude oil prices declined despite an apparent ceasefire between Israel and Hezbollah. The dollar lost about 1.7% for the week, while gold prices declined 2.0%.
Last Week’s Economic News
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- The third-quarter gross domestic product figure revealed the economy expanded at an annualized rate of 2.8%. In the second quarter, GDP increased 3.0%. Personal consumption expenditures, a measure of consumer spending, rose 3.5% in the third quarter. Nonresidential fixed investment advanced 3.8%, while residential fixed investment declined 5.0%. Exports rose 7.5% and imports, which are a negative in the calculation of GDP, advanced 10.2%. The personal consumption expenditures price (PCE) index increased 1.5% and 2.1% excluding food and energy.
- Personal income increased 0.6% in October, while disposable personal income, personal income less personal current taxes, increased 0.7%. Personal consumption expenditures (PCE) increased 0.4%. The PCE price index increased 0.2% in October. Excluding food and energy, the PCE price index increased 0.3%. Since October 2023, the PCE price index rose 2.3%. The PCE price index less food and energy increased 2.8% for the year.
- New orders for manufactured durable goods in October increased 0.2% following two consecutive monthly decreases. Excluding transportation, new orders increased 0.1%. Excluding defense, new orders increased 0.4%. Transportation equipment, also up following two consecutive monthly decreases, led the increase, advancing 0.5%. New orders for nondefense capital goods in October increased 1.4%, while new orders for defense capital goods in October decreased 4.0%.
- The advance report on international trade in goods for October showed the deficit was $99.1 billion, down $9.6 billion, or 8.8%, from the September estimate. Exports of goods for October were $168.7 billion, $5.6 billion, or 3.2%, less than September exports. Imports of goods for October were $267.8 billion, $15.2 billion, or 5.4% less than September imports.
- Sales of new single-family homes dropped 17.3% in October and fell 9.4% over the last 12 months. The median sales price of new houses sold in October 2024 was $437,300. The average sales price was $545,800. Inventory in October sat at a supply of 9.5 months.
- The national average retail price for regular gasoline was $3.044 per gallon on November 25.
- For the week ended November 23, there were 213,000 new claims for unemployment insurance, a decrease of 2,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 16 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 16 was 1,907,000, an increase of 9,000 from the previous week’s level, which was revised down by 10,000. This is the highest level for insured unemployment since November 13, 2021, when it was 1,974,000.
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Eye on the Week Ahead
One of the most closely watched of all economic indicators is the employment situation report, which is released this week for November. October saw the labor force increase by a scant 12,000. However, Hurricane Milton may have impacted the surveys that support the employment data. It would not be surprising to see October’s figures increase as more data is made available. However, the consensus for November, at about 125,000, is well below the monthly average for the year.
Have a nice week!
Sincerely,
Robert G. Carpenter