Kind of a busy day on the economic data front: Initial Claims, Durable Goods, Personal Income and Outlays, New House Sales, and Consumer Confidence. Here's a roundup, from Bloomberg:
Americans spent and earned more money in November and durable goods orders rebounded, showing year-end strength in the U.S. economy. Jobless claims rose less than forecast last week, and December's consumer confidence reached an 11-month high.
"The basic message of all these reports today is that the economy is in line for solid, above-average growth,'' said Ken Mayland, the president of ClearView Economics LLC...
One report showed housing may provide less strength for the economy. New home sales fell 12 percent in November to a 1.125 million annual rate from an all-time high in October, the Commerce Department also said today. The percentage decline, while the steepest in more than a decade, in part reflected a 50,000 upward revision to October's results. The median price dropped to $206,300 from $224,700.
"The housing sector has probably peaked, but the level of activity is still extremely high and other sectors such as capital spending will pick up the slack,'' Mayland said. "That will provide the juice for continued above-average growth.''
Consumer confidence rose to 97.1 this month from 92.8 in November in the University of Michigan's final reading today. December's figure was the highest since January.
Laurence Meyer, a former Fed Governor, adds this prediction on what it all means for monetary policy:
Meyer predicted the Fed will raise the overnight bank lending rate from 2.25 percent now to 3.5 percent by the end of 2005 to curb inflation. Core inflation, excluding food and energy, may rise about 2.25 percent in the year ahead and the Fed may act faster if inflation reaches 2.5 percent, he said.
The Bloomberg link also includes a handy sound clip, for those who prefer to take their news aurally.