Global Business Confidence:

Business sentiment has taken on a slightly better hue in late November. Although overall confidence has remained largely unchanged since early July, responses in regard to current business conditions, sales strength, and investment in equipment and software have improved in recent weeks. The survey results suggest that global growth may be gaining some traction at year's end after a lull this summer and fall. It is also encouraging that hiring intentions remain firm, and while pricing is soft, there is no indication that deflation is a serious problem. Nonetheless, businesses do not anticipate a significant acceleration in activity anytime soon, as expectations regarding the outlook into mid-next year have shown no meaningful improvement.

GDP: +2.5%
Real GDP increased 2.5% at an annualized rate in the third quarter. This was revised up from 2% growth in the advance estimate in October and was slightly better than the consensus forecast. The improvement came from upward revisions to consumer spending, exports, and state and local government. These were somewhat offset by a downward revision to investment in inventories. Corporate profits from current production rose by $44 billion in the third quarter, as firms benefit from stronger demand and earlier cost-cutting; they are now at a new high. The recovery continues, but the risk of a double-dip recession remains nearly one in three.

Personal Income: +0.5%
Personal income growth was unexpectedly strong, while spending growth accelerated modestly. Income was up 0.5% from September, after falling marginally that month. Spending grew 0.4%, up from 0.3% last month, but down from the prior two months. Wage income posted its strongest growth since May, while proprietors' income growth was robust. In a surprising reversal, interest income rose and dividend income fell. Spending growth was led by a large increase in goods spending, especially durable goods, as declining utility spending weighed on service spending. The saving rate rose to 5.7%. Real spending grew 0.3%, continuing recent trends as the top-line PCE deflator rose 0.2%. Core prices were unchanged again, as low inflation continues to support consumer budgets.

Mass Layoffs: +165
October's increase in mass layoffs diverged from trends in more timely weekly reports on initial claims for unemployment insurance. The rise in mass layoffs is likely noise, given that it is inconsistent with accelerating payroll employment. The number of layoffs involving at least 50 workers from a single establishment increased to 1,651 in October from 1,486 in September. These layoffs involved 148,059, compared with 133,379 in September.

Jobless Claims: -34,000
Initial claims decreased by 34,000 to 407,000 for the week ending November 20; the previous week's data were revised up slightly from 439,000 to 441,000. This is a substantial decline, and even though it seems likely that this is overdone, it is an encouraging sign that the labor market is moving in the right direction. Continuing claims decreased by 142,000 to 4.182 million for the week ending November 13, though there are millions more on extended and emergency benefits who are not counted in this figure.

Durable Goods (Advance): -3.3%
New orders for durable manufactured goods fell 3.3% in October, partially offsetting September's 5% rise. Excluding transportation, new orders declined 2.7%. Shipments declined 0.9%, and inventories were up 0.4%-the tenth straight increase. The details of the report were weak; core capital orders fell 4.5%, while shipments were down 1.5%-the first decline in nine months. Overall, the report was weak and adds risk to the durability of the manufacturing expansion in the fourth quarter.

New-Home Sales (C25): 283,000
Against expectations, sales of new homes dropped by 8.1% in October as compared with September. Not only did sales fall, but at an annualized pace of 283,000, new-home sales have dropped back down close to a record low. The months of supply increased slightly to 8.6, while the median sale price slid by 9% from one year ago.

MBA Mortgage Applications Survey: +2.1%
In the week ending November 19, the market index inched up 2.1% from the previous week, rising to 728.8. This comes amid a large increase in purchase applications: The purchase index jumped 14.4% to finish at 205. Meanwhile, the refinance index declined just 1%, falling to 3,793.6.

Existing-Home Sales: -2.2%
Fundamental housing demand is weak. Following a post-tax credit rebound in September, sales of existing homes slowed in October to 4.43 million annualized units, a decline of 2.2%. Single-family home sales are as slow as they were in the mid-1990s. Months of supply are stable but elevated at 10.6. The median house price is down 0.9% from one year ago.

FHFA Purchase-Only House Price Index: -3.4%
The FHFA monthly purchase-only index fell 0.7% in September from August and is down by 3.4% from September 2009, a price decline that was greater than expected. The quarterly purchase-only index fell 1.6% from the second quarter to the third, and is down by 3.2% from the third quarter of 2009. The decline in both purchase-only indices is not surprising given the steep decline in home sales for the third quarter of this year, as well as the effect of foreclosure sales from a still-rising inventory of foreclosed homes.

Chain Store Sales Snapshot: -0.6%
Chain store sales slipped for the second consecutive week as the strong start to November sales is not being sustained. According to the ICSC, sales fell 0.6% in the week ending November 20, and year-over-year growth dipped to 2.8% after two weeks over 3%. The ICSC also noted that its holiday spending survey shows holiday shopping proceeding at a slower pace than recent years despite retailers' efforts to spark early shopping.

Weekly Natural Gas Storage Report: -6.00 bcf
Working gas in underground storage fell by 6 billion cubic feet for the week ending November 19, surpassing the consensus estimate of a 1 bcf decline. This report should support the recent rise in natural gas prices.

Oil and Gas Inventories: +1 mil barrels
Crude oil inventories rose by 1 million barrels during the week ending November 19, surpassing expectations for a 2 million barrel decline. Gasoline inventories rose by 1.9 million barrels, also surpassing expectations, which were for a 1.3 million barrel dip. Distillate inventories fell by 500,000 barrels, contrasting with the consensus estimate of a 1.5 million barrel decline. Refinery capacity utilization rose substantially from 84% to 85.5%; the consensus estimate was for a smaller increase of just 0.4%. Petroleum demand was little changed. This report is consistent with the recent moderation in crude oil prices.

Source: Economy.com