Presents:
WEEKLY ECONOMIC UPDATE
December 17, 2012
WEEKLY QUOTE
The first time someone shows you who they are, believe them. - Maya Angelou
INFLATION DECLINES
With gasoline costs falling 7.4% in November and energy costs dipping 4.1% on the whole, it is hardly a surprise that the federal governments Consumer Price Index fell 0.3% last month its first decline since May. Core consumer prices rose 0.1%. The Producer Price Index also retreated 0.8% in November. In the past 12 months, America has seen 1.8% overall consumer inflation and 1.5% overall wholesale inflation. In AAAs December 13 survey, unleaded gasoline was averaging $3.29 per gallon nationally down 68 from its 2012 peak.1,2
WEEKLY TIP
The buy now, pay later mentality is a path to excessive debt. Save now and buy later instead.
IF JOBLESS RATE HITS 6.5%, FED MIGHT RAISE RATES
In a remarkably specific policy announcement, the Federal Reserves Open Market Committee said that the central bank would keep interest rates at historic lows at least as long as unemployment exceeds 6.5% and inflation is projected at 2.5% or less. If the jobless rate continues to fall as it has since July, the Fed could end up adjusting rates prior to 2015. The central bank also said it will buy more debt it will purchase $45 billion of Treasury bonds per month starting in January.1,3,4,5
RETAIL SALES IMPROVE 0.3%
WEEKLY RIDDLE
What do the letter T and an island have in common?
Last weeks riddle: Victor is assigned to paint suite numbers on doors at an office building with 100 suites, which will be numbered from 1 to 100. How many times will he have to paint the number 8? Last weeks answer: 20 times 8, 18, 28, 38, 48, 58, 68, 78, 80, 81, 82, 83, 84, 85, 86, 87, 88 (which has two eights in it), 89 and 98.
Novembers increase was a nice rebound from the 0.3% slip the Commerce Department had reported for October. Economists surveyed by Bloomberg had projected a November gain of 0.5%, however.5
STOCKS LOSE GROUND, NO PROGRESS IN WASHINGTON
Major stock indices declined last week as follows: S&P 500, -0.32% to 1,413.58; NASDAQ, -0.23% to 2,971.33; DJIA, -0.15% to 13,135.01. While President Obama and House Speaker John Boehner met privately last Thursday, there was no sign of a fiscal cliff deal emerging in the nations capital. Oil settled Friday at $86.73, and gold settled Friday at $1,697.00.6,7,8 THIS WEEK: No major U.S. economic releases are scheduled to come out on Monday. Tuesday, a new NAHB Housing Market Index arrives and Oracle offers a new earnings report. Wednesday, we learn about November housing starts and FedEx, Bed Bath & Beyond, Accenture and General Mills come out with earnings. Thursday, the final estimate of Q3 GDP, November existing home sales numbers, the Conference Board index of leading indicators and weekly jobless claims figures complement earnings from Nike, Micron, ConAgra, CarMax, Darden Restaurants, Discover Financial, Rite Aid and RIM. Friday brings the final University of Michigan consumer sentiment survey for December and reports on durable goods orders and consumer spending for November.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA NASDAQ S&P 500
REAL YIELD
+7.51 +14.06 +12.40
12/14 RATE
+11.09 +17.01 +16.65
1 YR AGO
-0.31 +2.55 -0.74
5 YRS AGO
+5.57 +11.81 +5.89
10 YRS AGO
10 YR TIPS
-0.74%
-0.04%
1.90%
3.10%
Sources: usatoday.com, cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 12/14/126,7,8,10,11,12
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Citations.
1 - www.bloomberg.com/news/2012-12-14/consumer-prices-in-u-s-decline-more-than-forecast-in-november.html [12/14/12] 2 - www.businessweek.com/news/2012-12-13/wholesale-prices-in-u-dot-s-dot-fell-more-than-forecast-in-november [12/13/12] 3 - www.cnbc.com/id/100311233 [12/13/12] 4 - www.federalreserve.gov/newsevents/press/monetary/20121212a.htm [12/12/12] 5 - www.bloomberg.com/news/2012-12-13/retail-sales-increase-as-americans-snap-up-autos-electronics.html [12/13/12] 6 - www.usatoday.com/money/markets/overview/ [12/14/12] 7 - www.cnbc.com/id/100315158 [12/14/12] 8 - online.wsj.com/mdc/page/marketsdata.html [12/14/12] 9 - montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12] 10 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12] 11 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/14/12] 11 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/14/12] 12 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]
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