FXStreet (Delhi) – Research Team at Nomura, reviews the data released in US and preview the forthcoming release of initial jobless claims data.
Key Quotes
“Preview:Initial jobless claims: The trend in jobless claims continues to signal limited layoffs and steady labor market conditions. Consensus expects 270k claims in the week ending 19 December.
Review
Personal income and spending: Personal income increased by 0.3% m-o-m in November, above market expectations but below our forecast (Nomura: 0.4%, Consensus: 0.2%). Personal spending increased by 0.3% m-o-m in November following a revised flat reading in October (previously reported as +0.1% m-o-m). Personal spending rebounded on stronger goods spending while service spending lagged behind.
On inflation, the PCE deflator was unchanged over the month (0.4% y-o-y) in November, below expectations but right in line with our expectations (Nomura: 0.0% m-o-m, Consensus: 0.1% m-o-m). Core PCE increased by 0.1% m-o-m (unrounded: 0.0114%), in line with expectations (Nomura: 0.0110% m-o-m, Consensus: 0.1% m-o-m), which left the year-over-year metric at 1.3% y-o-y.
Looking ahead, an expected waning of the negative base-effect will likely boost core PCE inflation to some extent. But as long as the underlying trend of medical care inflation (which carries a decent amount of weight in the core index) does not pick up, core PCE inflation is unlikely to accelerate materially
Durable goods orders were flat over the month in November, better than expectations (Nomura: -1.7%, Consensus: -0.6%), but excluding transportation goods, orders declined by 0.1%, slightly weaker than market expectations but below our forecast (Nomura: +0.2%, Consensus: 0.0%).
New home sales increased by 4.3% to an annualized 490k (Nomura: 505k, Consensus: 505k) following a revised 6.3% increase in the prior month to an annualized 470k. But the total net revisions were -36k.
The University of Michigan consumer sentiment index increased 0.8pt to 92.6 in the final reading in December. Both the current conditions and expectations sub-indexes moved higher to 108.1 and 82.7, respectively.
Q4 GDP tracking update: Personal spending came in above our expectations for November but the prior month was revised down, which was neutral for growth. But core shipments came in slightly weaker than our expectations, and durable goods inventories declined more than we had anticipated, implying more drag from an inventory drawdown. Taking all this into account, we revised down our Q4 GDP tracking estimate to 1.4% from 1.5%, previously.”
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